Elon Musk’s Tesla recoups all its year-to-date losses

The swagger is back in Tesla’s step.

A few months ago, Elon Musk’s company was the butt of every joke on Wall Street—a growth stock with no growth, to quote Wells Fargo. Pundits began questioning why anyone still included it among the high-flying Magnificent Seven after Tesla trailed all 499 other stocks in the benchmark S&P index—even the scandal-ridden Boeing.

No longer. Just in time for the start of 2024’s second half, Tesla has fully recouped its year-to-date losses after adding an eye-watering $150 billion in value to its market cap over the span of just three days this week.

$TSLA investors right now pic.twitter.com/yqa3efRxkc
— Teslaconomics (@Teslaconomics) July 3, 2024

“The worst is in the rearview mirror for Tesla as we believe the EV demand story is starting to return to the disruptive tech stalwart,” Wedbush Securities tech analyst Dan Ives wrote on Wednesday, upgrading his price target to $300 from $275 and reaffirming his “outperform” rating.

Musk is now back to his brash old self, exchanging one fantastical growth target that defies human reason for another, while warning any short-seller who gets in his way will be “obliterated”—Bill Gates included.

After consolidating around $180 for the better part of two months, bulls see further room for gains after the stock broke above the 200-day moving average under heavy trading volume, and now it looks as if it could snap the three-year downward trend.

Tesla $TSLA has done it! 2.5 year downtrend finally broken 🥳🍾🫂 pic.twitter.com/9kEQejJoNb
— Barchart (@Barchart) July 3, 2024

When one popular pro-Tesla account reminded the fan community late last month of the 2019 words of ARK Invest’s Cathie Wood regarding chart technicals that “the longer the base, the bigger the break out,” Musk quickly replied: “True.”

Q2 deliveries beat reduced expectations

This belief the stock has bottomed out and is poised to continue its rally in the coming months is reflected in some of the fundamentals now emerging.

Tuesday’s announcement of second-quarter vehicle deliveries for example was a stark contrast to the first-quarter figures that badly missed even the most bearish of forecasts. After expectations had consistently fallen in recent weeks, Tesla finally managed to draw a line under the issue by beating consensus with a comparatively mild decline in car sales.

Tesla's second quarter sales beat estimates.
About those estimates… https://t.co/N2EGBHVbXl via @opinion $TSLA pic.twitter.com/9TmW6xCpf6
— Liam Denning (@liamdenning) July 2, 2024

Massive growth in its lucrative energy storage business also helped support the argument that it is not just an EV company, as deployment volumes more than doubled over the previous quarterly record.

Many analysts and investors had until recently argued they needed to see an end to the downward revisions in earnings estimates before sentiment could sustainably improve.

Following Tuesday’s deliveries surprise, bulls like Ives—who described the Q1 volumes as both a “nightmare” and an “unmitigated disaster”—now believe the company has renewed the market’s faith in its growth story.

“This was a huge comeback performance from Tesla and Musk in 2Q with the Street expecting a clear miss this quarter with EV demand still choppy globally, yet Tesla delivered strong numbers at a key time for investors,” he continued.

With painfully high interest rates expected to ease later this year, the Aug. 8 reveal of the CyberCab robo-taxi just around the corner, and a new entry-level Tesla slated to debut around six months from now, the stock could be poised for further gains. It may even earn back its place in the pantheon of the Magnificent Seven.