Direxion Daily TSLA Bull 2X Shares (TSLL), a leveraged ETF that provides 2x daily exposure to the performance of Tesla (TSLA) stock, surged 6.33% on Wednesday, outpacing the broader market. The rally in TSLL reflects investors' optimism about Tesla's long-term growth prospects, despite the company facing near-term challenges.
Tesla's Q2 earnings report revealed some concerning signs, including a 9.3% year-over-year decline in automotive sales revenue, lower vehicle deliveries, and margin pressure due to increased competition and price cuts. However, the market seems to be focusing on Tesla's potential in areas like autonomous driving technology (FSD), robotaxis, and new products like the Optimus robot.
While Tesla's current automotive gross margin of 14.6% (excluding regulatory credits) is lower than its historical levels and closer to traditional automakers, investors are betting on the company's ability to monetize its FSD and robotaxi offerings in the future. Elon Musk, Tesla's CEO, has been vocal about the potential of these technologies, although concrete details and timelines remain uncertain.
Additionally, Tesla's Optimus robot project, aimed at automating various tasks, has generated significant interest and speculation about its potential impact on the company's valuation. Musk has claimed that Optimus could be valued "several times" higher than the $5 trillion estimate for Tesla's FSD business by ARK Invest.
