Tesla stock rose 2.6% in morning trading on Wednesday. All eyes remain on Austin, Texas with the company's robotaxi service launch just days away.
The stock is sure to be volatile before and after the luanch. Deciding what to do with shares might depend on an investor's time horizon.
Tesla stock dropped 3.9% on Tuesday, but that followed gains of 1.9% and 1.2% on Friday and Monday. Shares are bobbing up and down ahead of the launch with investors wondering what's next for the stock.
"You need to know if you're a trader or investor," says Zacks stock strategist Andrew Rocco. He runs Zacks' Technology Innovators Portolio, which holds Tesla stock.
There isn't anything wrong with being either. Traders, however, typically have a shorter time horizon and might be looking to take profits with Tesla stock up 33% since the company's April 22 earnings report, coming into Wednesday trading.
And the launch carries risk. The could be delays, hiccups, app issues, protests, or even accidents. Traders don't want to deal with any of that.
Many investors are likely to take a longer term view, though. With the launch, "People are going to price in robotaxi [into the stock]," adds Rocco. "I think people are starting to realize that Tesla will be able to catch up to Waymo [and] overtake them pretty rapidly just because of that scalability."
Essentially, any Tesla sold in the past few years can become a robotaxi. And Tesla can make more than 800,000 Model 3 and Y vehicles in the U.S. annually. Waymo, which successfully completes 250,000-plus sefl-driving taxi rides a week, has a fleet of roughly 1,500 cars.
Tesla can have as many robotaxis on the road as it wants, or as regulators allow. That, of course, depends on a smooth launch. Still, an actual robotaxi service would be compelling evidence that the company's AI initiatives can yield results.
That's the bull case anyway. Some bearish investors aren't willing to give Tesla credit for robotaxi yet and instead focus on falling car sales.
Bulls and bears disagreeing on the outlook for Tesla is nothing new.
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