Simply put, Tesla stock is on fire. Surely, investors know things will slow down. That might not be the right way to bet -- yet -- according to technical analysts.
With shares north of $460, Tesla is valued at about $1.5 trillion, up almost $700 billion since the Nov. 5 election.
"I thought hitting the $400 mark may trigger some profit-taking," said CappThesis founder and market technician Frank Cappelleri. "I guess not."
Cappelleri believed $400 was likely for Tesla shares after the stock broke decisively above $270, which happened after the Nov. 5 Presidential election. That turned out to be a prescient call and while he might be a bit surprised Tesla shares haven't slowed down, he sees some additional reasons for optimism.
"Using approximate numbers," shares gained about 1,850% between July 2010 lows and September 2014 and gained about 3,500% from June 2019 lows and November 2021, he added. Coming into the week, the stock was up about 350% from the 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 isn't alone in pointing out the potential for bigger gains. With the old high -- around $414 a share -- now in the rearview mirror, Fairlead Strategies founder and market technician Katie Stockton is looking for a run north of $500.
Both aren't making fundamental calls on Tesla shares. Technical analysts study charts, trading patterns, and history to get a sense of where a stock can go over the short and medium term. On that front, things look good for Tesla shares right now.
Still, stocks start to move for reasons. In the case of Tesla, investors believe self-driving technology is transformational. Tesla plans to launch a self-driving robotaxi service in late 2025. There is also a new, lower-price Tesla model that should go on sale this coming year. Both things could drive faster growth making 2025 look like 2021 when shares gained another 50% after an incredible 743% run in 2020.
"As long as that belief [in faster growth] remains, [it's] going to add fuel to the fire," says ChartSmarter founder and market technician Douglas Busch. He doesn't see much reason for shares to slow down either and sees a price above $700 as a possibility in late 2025.
That's months from now. In the very short term, Tesla stock might get another boost from Wall Street. Monday evening, Mizuho analyst Vijay Rakesh upgraded Tesla stock to Buy from Hold and increased his price target to $515 a share from $230. Self-driving cars are the main reason he is more bullish.
His target price now matches Wedbush analyst Dan Ives, who raised his target price to $515 a share from $400 on Sunday, helping Tesla stock add 6.1% on Monday. It closed at $463.02 a share.
Tesla stock rose 2% to $472.10 in premarket trading Tuesday, while S&P 500 and Dow Jones Industrial Average futures were down 0.4% and 0.5%, respectively early Tuesday.
Coming into Tuesday trading, shares were up about 86% so far in 2024 and up about 84% since the Nov. 5 election. Gains have added almost $700 billion in market value to the electric vehicle maker.
In the long run, technical patterns and fundamental realities need to agree. For now, the stock charts and investors say the same thing: Tesla's earnings will be much higher down the road. There will be risks to Tesla's earnings -- just like for any company -- but for now, the market is focused on the rewards.
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