In its biggest daily rise in 2021, the shares of electric vehicle manufacturers surged nearly 20% on March 9 and added $100 billion more to its market capitalization. The surge also stopped a 5-day loss streak for Tesla which was caused by rising interests that scared investors.
The Elon Musk-owned Tesla’s stock ended at $674.48 after the stocks surged to see its strongest daily rise on Tuesday. Although the surge is lucrative for new investors, one needs to note that the stock is still down more than 20% from the January record high. The word from the investor’s street suggests that traders exchanged $43 billion worth of Tesla shares on Tuesday which is more than any other stock. To put this in perspective, it was triple the amount of the second-most traded company Apple.
Pierre Ferragu, head of the Global Technology Infrastructure research team, New Street Research has been one of the biggest bulls for Tesla. After the 20% surge, Ferragu rated Tesla’s stock as buy and raised the price target to a whopping $900 apiece from $578.
The main reason why he recommends Tesla and is expecting the shares to surge even further is his confidence in the company’s outlook for the next couple of years. “Tesla will be in a position to deliver 2 [million] units in 2023 and deliver earnings of $12, more than 50% above current expectations,” wrote Ferragu. With incomes way better than expectations seeming like a possibility, Ferragu believes the Tesla stock will continue surging with price-to-earnings ratios 50-100 times.
Another reason why Tesla’s stocks saw a sudden surge is that the shares of Tesla in China also rose. In February, Tesla delivered about 18,300 cars more than it delivered in January. Considering the Lunar New Year holiday puts a dent in delivery figures for companies, it’s a massive achievement for the electric-vehicle company.
It’s fascinating how Tesla and Tesla founder Elon Musk are renowned for being “firsts” in the space they are at. Back in 2012, Tesla launched the first-ever premium electric sedan in the world, the Tesla Model S. In 2018, Elon’s SpaceX launched the world’s most powerful rocket Falcon. Falcon in its two also carried the Tesla Roadster into space, making it another first for both Musk and his companies.
Also read: SpaceX’s futuristic Starship SN10 aces touch down and explodes after landing
But recently, Elon Musk clinched another first and not the one he may be proud of. His stocks recently lost the most value ever in a brief period. On March 5, Tesla’s shares slipped to $566 from $883 and wiped the total market cap from $544 billion to $305 billion.
Tesla suffering such a huge tumble is explained by Tesla’s bulls as the volatile nature of its stocks. Are most amateur traders really sure about what Tesla will make them earn in the future? It remains to be seen. For now, we have an environmentally conscious product, an outspoken CEO behind it, a cult following around it, and a popcorn crunch-worthy narrative to enjoy.
Meanwhile, thanks to Tesla’s surge, Elon Musk added $25 billion in just one day to his fortune. This surge pushed the innovator’s fortune to $174 billion and closed the gap with Amazon founder Jeff Bezos’s fortune. Meanwhile, Amazon’s shares also saw a surge which helped Bezos add $6 billion to his net worth which is $180 billion as of now.
Also read: Tesla CEO no longer World’s Richest Person; $15.2 billion wiped from Musk’s fortune due to his tweet
