Shares of Tesla ( TSLA ) were on track for a 10th straight day of gains on Tuesday, as shares rose about 4% higher in midday trading.
The positive moves mean Tesla has erased all of its year-to-date losses with the stock up about 5% since the start of the year. Shares are also up about 75% since hitting 52-week lows in April.
Analysts have credited the company’s second-quarter vehicle production and delivery numbers, which beat Wall Street expectations, along with momentum surrounding Tesla’s artificial intelligence businesses.
“Suddenly, the market is appreciating the upside potential for Tesla,” Seth Goldstein, equity strategist at Morningstar, told Yahoo Finance. “The first quarter delivery surprised to the downside, so the market was assuming a lower growth rate, and that’s why we’ve seen the big increase.”
Tesla is set to report its next quarterly results on July 23 after the market closes. He has staked the development of more affordable electric vehicles (EVs), which investors see as another key catalyst for growth.
But Goldstein said the company will need to set a “firm and concrete timeline” when it comes to rolling out these cars, which the company previously said could happen in 2025.
“We have to see that it is fulfilled or postponed earlier so that [Wall Street] we can assume that Tesla will see a second wave of shipment growth starting in 2026,” he said. “As long as that narrative remains intact, I think the stock will be OK. But if that gets pushed back or if management sounds more uncertain that that’s going to happen, then I think we could see the stock go down.”
In addition to earnings and shipments, investors will also be looking for another growth opportunity: robotaxis. The company is set to unveil its much-anticipated robotaxis on August 8.
Tesla shares fell in the first half of the year after its fourth-quarter earnings missed on both the top and bottom lines. A 9% year-over-year decline in first-quarter vehicle shipments sent the stock even lower as investors questioned the EV maker’s high valuation and lingering demand in the US.
Shortly after the delivery failed, the company laid off more than 10% of its staff. At the time, analysts categorized the layoffs as an “ominous signal” of what’s to come.
Competition abroad from Chinese EV makers including Lucid ( LCID ), Li Auto ( LI ), Nio ( NIO ) and XPeng ( XPEV ) has also served as a significant exit, fueling a price war that forced Tesla to aggressively lowers prices in order to compete.
As a result, short sellers have piled into the name — but now they’ve been crushed by its latest rally.
“Short sellers have been up and down on this name over the past two years. It was the number one short in the market. Now it’s number four behind Nvidia, Apple and Microsoft,” S3 Partners Ihor Dusaniwsky told Yahoo Finance on Tuesday. . “But that’s like the OG acronym. Everyone’s still on it.”
Alexandra Canal is a senior reporter at Yahoo Finance. Follow him to X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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