Tesla (TSLA) shares closed up about 4% on Tuesday, securing their 10th straight day of gains.
The positive moves mean Tesla has erased all of its year-to-date losses, with the stock up around 5% since the start of the year. The stock is also up around 75% since hitting 52-week lows in April.
Analysts have attributed the success to the company’s second-quarter vehicle production and delivery figures, which beat Wall Street expectations, along with momentum surrounding Tesla’s artificial intelligence business.
“Suddenly, the market is pricing in Tesla’s growth potential,” Seth Goldstein, equity strategist at Morningstar, told Yahoo Finance. “First-quarter deliveries surprised to the downside, so the market was assuming a lower growth rate, and that’s why we’ve seen the big rally.”
Tesla is scheduled to report its quarterly results on July 23, after the market closes. The company has announced the development of more affordable electric vehicles, which investors see as another key catalyst for growth.
But Goldstein said the company will need to set a “solid, concrete timeline” when it comes to launching those cars, which the company has previously said could happen as early as 2025.
“We need to see that this is fulfilled or promoted beforehand so that [Wall Street] “We can assume that Tesla will see a second wave of delivery growth starting in 2026,” he said. “As long as that narrative remains intact, I think the stock will be fine. But if that is delayed or if management seems more unsure that that is going to happen, then I think we could see the stock falter.”
In addition to earnings and deliveries, investors will also be keeping an eye on another growth opportunity: robotaxis. The company is scheduled to unveil its long-awaited robotaxi on August 8.
Tesla shares plunged in the first half of the year after its fourth-quarter financial report missed expectations on both the top and bottom lines. A 9% year-over-year drop in first-quarter vehicle deliveries sent the stock further down as investors questioned the EV maker’s sky-high valuation and remaining U.S. demand.
Shortly after the botched delivery, the company cut more than 10% of its staff. At the time, analysts called the layoffs an “ominous sign” of what was to come.
Overseas competition from Chinese EV makers including Lucid (LCID), Li Auto (LI), Nio (NIO), and XPeng (XPEV) has also served as a significant limiting factor, fueling a price war that has forced Tesla to aggressively cut prices in order to compete.
As a result, short sellers have pounced on the name, but have now been crushed by its recent rally.
“Short sellers have been going up and down on this name for the past two years. It was the No. 1 short in the market. Now it’s No. 4 behind… Nvidia, Apple and Microsoft,” S3 Partners’ Ihor Dusaniwsky told Yahoo Finance on Tuesday. “But this is like the original short. Everyone is still in it.”
Alexandra Channel is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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