Tesla is the weakest link of the so-called ‘Magnificent-Seven’ — a group of tech stocks that have for the most part, barring Apple and Tesla, outperformed the rest of the stock market. Now the Elon Musk EV company is making a comeback.
Tesla shares are up 30% from a week ago, since the company reported better-than-feared second quarter sales of its electric vehicles. Its stock is finally in the green year-to-date, up 3% since the beginning of 2024, reversing steep losses.
It’s still much less successful than its counterparts: Microsoft, Meta, Nvidia, Google, Amazon, and Apple. Those companies have all been riding the AI wave, with investors cheering their advancements of AI chips, chatbots, and other tools. Shares of the AI hardware company Nvidia, for example, are up a staggering 200% from last year. Apple, which lagged behind other Big Tech companies, has seen its stock price jump 14% since the beginning of last month, when it finally announced its AI project called Apple Intelligence.
Tesla struggled in the beginning of 2024. After a massive recall of nearly all Tesla vehicles on U.S. roads, its first-quarter sales fell far short of Wall Street’s expectations. Its stock price plummeted to a low of about $139 in April. Its ascended to more than $100 more than that stock price, sitting around $255 per share in Monday afternoon trading.
But Tesla’s ascent may not last. Bernstein analyst Toni Sacconaghi appeared wary of the stock in an interview with Rebecca Quick of CNBC Squawk Box on Monday, noting that its deliveries, while better than expected, are still down 5% year-over-year.
“We could continue to see some momentum in the stock, but this is meme-like, quite frankly. The valuation is disconnected from the fundamentals,” he said.