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Tesla (TSLA) extended its rally on Thursday, decisively rising above $ 2,000 a share and setting a new record ahead of an expected 5-to-1 split, and its upcoming inclusion in the S&P 500 (GSPC) Index.
The eco-friendly automaker’s stock, currently one of the most expensive on Wall Street and up nearly 7% intraday, has soared without an immediate catalyst. Tesla rose to $ 2,021.99 before cutting those gains slightly.
Yet CEO Elon Musk, a prolific voice on Twitter who has courted multiple controversies with regulators and investors with his posts, exulted as Tesla reached new heights – burning bearish short sellers pitted against stocks. The company is also backed by a core of vocal and passionate supporters among its class of investors.
However, the good news has accumulated for a company that has spent much of the past year under pressure from analysts and investors. Its market capitalization – currently close to $ 400 billion – eclipses that of its most established automotive competitors, including General Motors (GM), Ford (F) and BMW, the German luxury car supplier ( BMW).
More recently, Tesla posted a surprise profit in the second quarter, with the electric car maker delivering more vehicles than expected despite the virus disruption. And as consumer demand for electric vehicles (EVs) grows both nationally and internationally, Teslas accounts for nearly 82% of all electric vehicles sold in the United States in the first half of the year, according to Share Purchase data. According to the data, 71,375 Teslas EV models were sold, led by the company’s burgeoning Model 3.
Wedbush Securities, which earlier this week predicted a move to $ 1,900, expects the automaker to expand its grip on the all-important Chinese market this year – reaching 150,000 delivered vehicles.
“This is pent-up demand,” analyst Dan Ives told Yahoo Finance’s The First Trade.
However, other analysts see risks for a stock that, while fooling short sellers, still faces significant headwinds.
David Trainer, CEO of investment research firm New Constructs, said in a research note earlier this month that investors would eventually “wake up to Tesla’s competitive disadvantage and reduce the stock to 250-300 $ / share, where a White Knight buyer could pick it up. . “
He added that Tesla’s bulls “tend to overlook the slow, but deliberate and wide entry that incumbent automakers will make into the electric vehicle market. By 2025, these companies are expected to sell around 3.1 million electric vehicles, which is far more than Tesla’s most optimistic sales estimates in 2025. “
Javier David is an editor for Yahoo Finance. Follow him on Twitter: @TeflonGeek
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