Tesla ( TSLA ) shares extended their gains on Wednesday, rising more than 6% after jumping as much as 10% on Tuesday as Wall Street weighed in on the electric carmaker’s quarterly results on vehicle deliveries that beat expectations. Tesla shares are now up more than 70% since their most recent low in late April.
Tesla this week reported that it produced about 411,000 vehicles and delivered nearly 444,000 in the second quarter, beating expectations and up from the first quarter.
And despite the year-over-year decline in deliveries, analysts were optimistic about the report, pointing to signs that the EV industry is performing better than expected.
“We continue to see room for improvement in sentiment around Tesla shares and broader electric vehicle sentiment, compared to the negative sentiment we have seen over the past six months,” Citi analysts wrote in a note after Tuesday’s results.
Dan Ives of Wedbush Securities said in a note that the company’s deliveries marked a “major turning point” in the “Tesla bull story.”
“The key for Tesla stock is that Wall Street recognizes that Tesla is the most undervalued AI player in the market,” wrote Ives, who “got the mojo back for Musk” when he raised his price target on the stock to $300 from $275 with a new upside scenario of $400 for 2025.
Ives added that the company’s Robotaxi event on August 8 will “push the yellow brick road to [full self-driving] and an autonomous future.”
Morgan Stanley’s Adam Jonas called Tesla’s results the “first positive surprise of the year,” noting that the automaker delivered 33,000 more units than it produced in the second quarter.
The analyst also highlighted a “show stealer” from his press release: Tesla’s energy storage business, which posted its highest quarterly earnings to date. The business, which includes utility-scale megapacks, is growing faster than the EV segment, with record profit margins.
“Tesla kicked off its Independence Day celebrations early with a positive second-quarter delivery count, a 33,000 inventory drop and a big storage performance to remind investors it’s not just a car company,” Jonas wrote.
His team has given the stock an Overweight rating with a $310 price target.
Tesla has faced stiff competition from its Chinese peers abroad and has seen demand for electric cars in the U.S. wane. In an effort to cut costs, the company earlier this year began a plan to lay off more than 10% of its global workforce, which some analysts saw as a sign of tough times ahead.
At Tesla’s shareholder meeting last month, CEO Elon Musk confirmed that demand and sales will still be tough in the near term as the industry is in a transition period.
The company also cut prices last year to boost sales.
“There is still the risk of further price cuts in the future, and there is still a risk that prices will fall.” [are] “There are still questions about fundamentals, we’re still sort of in the EV winter on demand,” Barclays senior equity research analyst Dan Levy told Yahoo Finance on Tuesday. “So, good outcome. But I think the fundamental macro backdrop is still the same.” Levy has an EqualWeight rating on the stock and a $180 price target.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X on @ines_ferre.
