Tesla’s stock surge in December, driven by Elon Musk’s endorsement of Donald Trump, has investors taking notice. However, the electric vehicle sector as a whole is facing mixed signals ahead.
Data from S&P Global Market Intelligence shows that Tesla’s stock rose 17% in December, but EV charging companies like ChargePoint Holdings and EVgo saw their shares decline. ChargePoint’s stock fell 12.3%, while EVgo’s share plummeted 37.8%.
The disparity can be attributed to Tesla’s unique case. The company’s investment in autonomous vehicles and artificial intelligence infrastructure has investors optimistic about a potential expedited regulatory process for fully autonomous vehicle approval nationwide. This could bring significant revenue from self-driving software sales.
However, existing EV tax credits may be withdrawn, which could benefit Tesla as it is already profitable. Other EV makers may struggle to compete if they drive increasing losses, further eroding market share.
The recent loan and share sale by EVgo have also affected the company’s stock. The loan and secondary offering put downward pressure on shares, but investors are still bullish about the company’s long-term prospects.
Tesla’s energy storage segment is expected to continue growing, with new deployments and a megafactory in China set to boost business further. A new, lower-priced vehicle may also be announced this year.
As Tesla prepares to report fourth-quarter and full-year 2024 earnings on January 29, investors will be keenly watching for insights into the company’s plans for 2025. While risks remain high, the future potential justifies a small position in the stock.
For those who feel they’ve missed the boat on successful stocks, a “Double Down” recommendation may be worth considering. Historically, companies like Nvidia, Apple, and Netflix have seen significant returns when analysts recommended investing early. With Tesla’s unique strengths and potential for growth, it may be time to take another look at this promising stock.
Source: https://finance.yahoo.com/news/why-tesla-stock-jumped-december-215235741.html