Elon Musk’s Tesla recovers all its losses year-over-year

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The jumper is back in Tesla’s stride.

A few months ago, Elon Musk’s company was at the center of every joke on Wall Street, a growth stock without growth to quote Wells Fargo. Pundits began to question why anyone still included it among the high-flying “Magnificent Seven,” as Tesla trailed all 499 other stocks in the benchmark S&P index — even scandal-ridden Boeing.

Not longer. Just in time for the start of the second half, Tesla has fully recouped its year-to-date losses as it added an impressive $150 billion to its market cap in just three days this week.

“The worst is in the rearview mirror for Tesla as we believe the EV demand story is starting to turn on the power of disruptive technology,” Wedbush Securities technology analyst Dan Ives wrote Wednesday, upgrading his price target to $300 from $275 and reaffirming “I pass” the assessment.

Musk is now back to his brash old self, trading one fantastical growth target that defies human reason for another, while warning that any short sellers who get in his way will be “wiped out” – including Bill Gates.

After consolidating around $180 for the better part of two months, bulls see further room for gains as the stock broke above its 200-day moving average under heavy trading volume and now looks set to snap a three-year downtrend.

When a popular pro-Tesla account reminded the fan community late last month of ARK Invest’s Cathie Wood’s 2019 words about charting techniques that “the longer the base, the bigger the breakout “, Musk quickly replied: “True.”

Second quarter shipments beat reduced expectations

This belief that the stock has bottomed out and is poised to continue its rally in the coming months is reflected in some of the fundamentals emerging now.

Tuesday’s announcement of second-quarter auto deliveries, for example, was a stark contrast to first-quarter numbers that badly missed even the lowest estimates. After expectations had fallen steadily in recent weeks, Tesla finally managed to draw a line under the issue by beating the consensus with a relatively mild decline in car sales.

Massive growth in its profitable energy storage business also helped support the argument that it’s not just an EV company, as deployment volumes more than doubled from the previous quarterly record.

Many analysts and investors had until recently argued that they needed to see an end to downward revisions to earnings estimates before sentiment could sustainably improve.

After Tuesday’s shipment surprise, bulls like Ives — who described first-quarter volumes as a “nightmare” and “unmitigated disaster” — now believe the company has renewed market confidence in its growth story.

“This was a big comeback performance from Tesla and Musk in the second quarter with the Street expecting a clear loss this quarter with EV demand still volatile globally, yet Tesla delivered strong numbers at a key time for investors,” it continued he.

With painful interest rates expected to ease later this year, the Aug. 8 unveiling of the CyberCab robotics looming, and a new entry-level Tesla expected to debut about six months from now, the stock could be poised for further profits. She may even regain her place in the pantheon of the Magnificent Seven.

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