Tesla Stock Soars. Here Are Four Reasons Why.

Text size

Tesla is planning to show off its self-driving technologies during an AI day on Aug. 19.

Kena Betancur / AFP via Getty Images


stock jumped Thursday. It’s hard to find just one reason why. But it isn’t hard to find three or four.

Shares of Tesla (ticker: TSLA) closed up 4.7%, at $677.35. The

S&P 500


Dow Jones Industrial Average

both finished the day up 0.4%.

That’s a nice bump. Here’s probably why:

One, a tweet from CEO Elon Musk. He told his 58.6 million followers that Tesla is hosting an artificial intelligence day on Aug. 19. The electric vehicle pioneer will put its self-driving technologies on display, hoping to convince more investors that it has a lead in autonomous driving.

The event should be a little like Tesla’s battery technology day in September. That day, the company introduced investors to innovations, such as larger battery cells, designed to improve Tesla’s cost and range in the future.

Another is the infrastructure bill in the Senate. Now, the bill doesn’t include EV purchase incentives, which would be the biggest boon to EV makers. But it does include money for cities and states to invest in EV-charging infrastructure—and any movement from Washington is a good thing for the EV industry.

Third, there’s the delayed earnings reaction. Tesla’s second-quarter earnings report was beyond good. The company set records for operating and net profit. But the stock dropped 2% the following day. So did shares of NIO (NIO) and XPeng (XPEV)—8.8% and 14.7%, respectively. The

Nasdaq Composite

dropped 1.2%.

Blame a crackdown by Chinese regulators, which pushed down stocks across the board. It was tough for Tesla not to get caught up in the rout. But Chinese stocks have bounced back, lifting some of the Chinese overhang. NIO stock, for instance, rose 6.2% on Wednesday and was up another 2% on Thursday.

Finally, Tesla investors should give a nod to

Ford Motor

(F) for Thursday’s gains. Ford reported earnings late Wednesdayand results were far better than expected. And Ford executives said the global chip shortage that has slowed automotive production is easing. That’s good news for everyone, including Tesla. Ford stock is gaining as well, up almost 4% in late trading.

With Thursday’s gains, Tesla stock is now down just 4% year to date, but still down about 25% from the January 52-week high of $900.40 a share. The strong earnings report might not be enough to send it back there, but Tesla bulls will look forward to catalysts like AI day, government support and, eventually, new production in Germany and Texas to get the stock moving again.

Write to Al Root at allen.root@dowjones.com

Related post