A road sign stands next to a charging station for electric vehicles in this image.
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Tesla
The stock has dropped once more. On Wednesday, the
The Nasdaq Composite Index (Nasdaq) is a stock
The price of several highly valued tech equities, including Tesla, continues to rise. Tesla bulls and bears may be concerned about recent trade activity. However, there isn’t much going on. It’s only the dog days of July. Even still, as electric vehicle manufacturers begin to announce second-quarter results, there is one area to keep an eye on.
In lunchtime trade on Wednesday, shares were down nearly 2%. The Nasdaq Composite Index is up a smidgeon. Tesla’s stock (ticker: TSLA) is down nearly 5% year to far, while the Nasdaq is up 1.2 percent. Furthermore, Tesla is still down almost 28% from its January 52-week high of $900.40. On Wednesday, the Nasdaq reached a new high. It’s all too easy to hunt for a good core basis for the disparity. Recent publications about the safety of Tesla vehicles may have influenced market sentiment this week. Even still, it doesn’t seem like it’s enough to justify the cut. And there’s a recent positive for every prospective recent bad. On July 1, Morgan Stanley analyst Adam Jonas noted that Tesla was ramping up management recruitment in the country. Bulls can cling to that as a positive. Tesla’s entry into India could result in a lower-cost electric vehicle and expansion into a new market. Jonas is a Tesla bull who rates the stock as a Buy. His price target for the stock is $900 per share. Tesla’s recent trading pattern could be explained by the fact that EV stocks, including Tesla, began to recover before the Nasdaq. EV stocks, such as Tesla stock and companies like Tesla.
Fisker
Faraday Future, which is combining with SPAC, (FSR) and Faraday Future, which is merging with SPAC
Acquisition of Real Estate Solutions
(PSAC) and a Chinese electric vehicle manufacturer
NIO
(NIO), to name a few–all reached 52-week highs in January and February. Then, due to a global semiconductor shortage that impacted vehicle production around the world, investors began to be concerned about growth. The majority of EV stocks are overvalued, and investors anticipate significant growth in sales and profit margins. Furthermore, higher interest rates harmed EV stocks. Around February, interest rates began to climb. Higher rates affect growth stocks with higher valuations more than others since it costs more to fund growth. Furthermore, rising companies produce the majority of their cash flow years later. In today’s dollars, higher rates lower the value of that cash. However, the semiconductor scarcity subsided, rates leveled off, and Chinese EV sales continued to rise year after year. China is the world’s largest new car market, as well as the world’s largest market for new electric vehicles. As a result, EV stocks have risen more than 20% on average, while the Nasdaq and S&
S&P 500 Index
The value of the dollar increased by nearly 7%, and the value of the yen
The Dow Jones Industrial Average is a stock market index that measures how well
Gained approximately 4%. Tesla’s stock, on the other hand, has dropped around 3% in the last three months. Tesla’s failures in China may be the most responsible for impacting on investor sentiment, given how the other EV stocks have responded. Tesla had some negative press as a result of how it handled a brake complaint, and the firm issued a technical recall to address a cruise control issue. Although there was a recall, the problem was resolved with an over-the-air software update. There was no need for the autos to visit a mechanic. In the second half of 2021, China appears to hold the key for Tesla and most EV stocks. Stocks are, of course, affected by company-specific circumstances. However, regardless of what happens in the rest of the market, more Chinese growth should mean more EV gains. When Tesla reports profits later in July, investors will be waiting for information on Chinese sales, production, and demand. In the second quarter, Tesla delivered over 200,000 vehicles, a new high for the firm. Tesla, on the other hand, does not break out quarterly deliveries by geography. Another important data point will be NIO’s and its peers’ third-quarter delivery forecasts. Despite production issues caused by the chip scarcity, NIO management expects to meet the high end of its second quarter delivery guidance. Around July 22, Tesla is expected to release its financial results. NIO is expected to arrive in the first few weeks of August. Neither company has given a firm date for its results announcement. To contact the editors at Barron’s, send an email to editors@barrons.com./n
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