Tesla stock just might be in the midst of its third “monster move” upward. One thing needs to happen to keep the sharesrising, though.
Tesla stock is in the midst of an incredible rally. It’s happened before.
“Using approximate numbers” shares gained about 1,850% between lows reached in July 2010 and September 2014, said CappThesis founder and market technician Frank Cappelleri. They gained about 3,500% from lows in June 2019 and November 2021.
Coming into this week, Tesla stock was up about 350% from its 2023 lows—so far. “That suggests that this still could be the early stages of the stock’s third monster move going back to 2010,” Cappelleri said.
He isn’t making a fundamental call on Tesla stock. Cappelleri studies stock charts and market history to get a sense of what investors are thinking—and what they can do to stock prices.
Investors should take note of Tesla’s history. Still, stock charts eventually have to reflect company fundamentals—and vice versa.
That’s what happened in the prior two rallies. “Monster moves” were accompanied by rising earnings estimates. In other words, the stock market got it right. Shares moved higher as the business was getting better.
The 2010 rally was the era of the Model S launch. The car proved that Tesla could manufacture high-quality, desirable all-electric cars. From 2010 to 2013, when the rally started to lose steam, Wall Street estimates for Tesla’s 2013 earnings went from a loss to a small profit. Tesla ended up earning about a nickel a share in 2013.
The 2019 rally was the era of the Model Y. It, and the Model 3, proved Tesla could build millions of mass-market cars profitably. From 2019 to 2022, when that rally started to lose steam, Wall Street estimates for 2022 earnings per share went from about $1.40 to $4. Tesla earned a little more than $4 a share in 2022.
Looking ahead, Tesla is expected to earn about $5 a share in 2027—a few years from now. That number needs to rise for shares to keep gaining.
Tesla stock closed down 0.9% at $436.17 while the S&P 500 lost 0.1% and the Dow Jones Industrial Average finished just about flat.
One thing influencing shares on Thursday will be European auto-registration data for November. Car buyers registered about 26,000 Teslas, down almost 30% year over year.
While a decline isn’t what investors want, the data only cover one month. The weak November data, however, do mean that Tesla will need a big December and big sales numbers in China and the U.S. to hit its goal of selling about 515,000 cars in the fourth quarter. The current Wall Street consensus forecast is for fourth-quarter deliveries of about 503,000, according to FactSet.
Another factor could be the idea of CEO Elon Musk serving as Speaker of the House. It seems unlikely, but Kentucky Sen. Rand Paul floated the idea on Thursday morning.
Then there is the market.
Shares were hammered on Wednesday, after Federal Reserve Chairman Jerome Powell indicated there will be fewer rate cuts than investors expected in 2025. Tesla stock dropped 8.3%, closing at $440.13. Still, Tesla stock hit a record intraday high at $488.54 a share. It gave up about $48, or 10%, as the market sold off late in the day.
Wednesday’s move still left shares up almost 1% for the week. Coming into Thursday trading, Tesla stock was up about 77% so far this year and about 75% since the Nov. 5 presidential election.
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