HomeBusinessTesla Stock: Elon Musk says 'blindingly clear' to focus on autonomy Cathie...

Tesla Stock: Elon Musk says ‘blindingly clear’ to focus on autonomy Cathie Wood continues to buy.

Tesla (TSLA) CEO Elon Musk told X, formerly Twitter, late Tuesday that while he’s not betting on the entire EV giant, focusing on autonomy is a “blindingly obvious” move. Meanwhile, Tesla shares broke below the 2024 low on Tuesday and Cathie Wood stuck with tradition and loaded up on TSLA stock.


It has become increasingly clear in recent weeks that Tesla and Musk are shifting to a greater focus on autonomy, full self-driving (FSD) and its robotaxi program, as demand for electric cars has declined in 2024. Musk recently announced that Tesla will unveil the robotaxi. August the 8th.

The Tesla chief wrote on X on Tuesday that he’s “not entirely betting on the company, but putting balls to the wall on autonomy is a blindingly obvious move.”

“Everything else looks like variations on a horse-drawn carriage,” Musk added.

Musk’s comments come as Tesla this week cut its global workforce by more than 10% as part of its next “phase of growth.” There is also mounting evidence that Tesla has at least delayed its $25,000 next-generation vehicle, the so-called Model 2, to focus efforts on autonomy and its robotaxi program. The Model 2 has been a key part of many Tesla analysts’ predictions.

Meanwhile, Tesla on Wednesday asked shareholders to ratify Musk’s $56 billion compensation plan for 2018, despite a Delaware court annulling the plan earlier this year. The shareholders’ meeting is scheduled for June 13.

See also  Why AMD stock sank today

Tesla shares fell 0.4% to 156.43% in market action on Wednesday. On Tuesday, TSLA fell 2.7% to 157.11, hitting a 2024 low of 153.75 intraday. The move undermined the March 14 low of 160.51.

Cathie Wood and her Ark Invest funds bought 20,683 shares of Tesla on Tuesday, according to daily trading information. Wood strengthened Ark’s Tesla holdings in 2024.

Wood’s Tesla transactions were made through the ARK Innovation ETF (ARKK), ARK New Generation Internet (ARKW) and ARK autonomous technology (ARKQ). As of April 17, TSLA ranks first in ARKK and ARKQ with a weight of 9.8% and 10.01%, respectively. Meanwhile, Tesla stock is ranked fifth in ARKW, with a weight of 6.92%.

Cathie Wood has long been optimistic about Tesla’s autonomy push and robotaxi.

Ready for first quarter profits

With few details on Musk’s strategy for the robotaxi and next-generation vehicle, investors and analysts appear skittish ahead of the upcoming earnings call next Tuesday.

Analysts expect first-quarter earnings to fall about 40% to 50 cents per share, while revenue will fall about 4% to $22.43 billion. If Tesla’s first-quarter earnings per share come in as expected, it would be the lowest quarterly level since the EV giant traded at 48 cents per share in the second quarter of 2021.

See also  Nvidia shares are rising. Why AMD could be a more tempting AI chip bet

Tesla reported in early April that a total of 386,810 vehicles were delivered worldwide in the first quarter, while the company produced 433,371 vehicles. Deliveries total 369,783 Model 3 and Model Y units, along with 17,027 “other” vehicles. Tesla’s first-quarter deliveries of 386,810 undercut even the lowest estimates and mark the lowest quarterly deliveries since 344,000 in the second quarter of 2022.

The EV giant blamed the first quarter performance on issues with production ramp-up of the updated Model 3 and factory closures.

On Tuesday, Tesla also appeared to be eliminating all US discounts on existing stock models.

Musk wrote on X that the EV giant is “simplifying and streamlining Tesla’s entire sales and delivery system.”

To maintain sales momentum in 2023 and 2024, Tesla has aggressively lowered car prices and offered discounts. Automotive gross profit margins, excluding regulatory credits, which peaked at 30% in the fourth quarter of 2021 due to industry chip shortages, have fallen well below 20%.

Tesla has offered deep discounts on stock Model Y models in the US and other markets over the past year.

Eliminating discounts could support Tesla’s declining profit margins, but would likely hurt demand.

Tesla stock performance

TSLA shares rose 3.7% to 171.05 last week, buoyed by Elon Musk’s promise of unveiling a robotaxi on August 8. The week before, Tesla stock fell 6.2% and Cathie Wood bought nearly 453,000 shares, according to daily trading information.

See also  Nvidia and JPMorgan Chase lead five stocks near buy points

TSLA stock is trading below its 50-day moving average, after falling about 13% in March.

Tesla stock has plummeted in 2024, but at least it’s cheaper, right? No

According to the Wall Street consensus, Tesla earnings for 2024 are well below 2023 levels. That signals a new year of profit declines for this growth stock. According to FactSet, Wall Street currently expects Tesla earnings per share of just $2.67 in 2024. That would be a decline of more than 13% from last year’s $3.12.

Wall Street’s 2024 consensus estimates for Tesla have fallen more than 30% since the end of 2023.

Looking further ahead, Wall Street estimates that Tesla’s earnings per share will reach $3.65 in 2025, down from the projection of $5.29 at the end of 2023, according to FactSet.

The EV giant ranks eighth in the 35-member IBD Auto Manufacturers industry group. The stock has a Composite Rating of 34 out of a best possible 99. Tesla stock also has a Relative Strength Rating of 11 and an EPS Rating of 67.

Follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.


Is Tesla stock a buy or a sell?

Get full access to IBD stock lists and ratings

Want to learn how to pick great stocks? Read Investors Corner

Is Rivian a buy now after it launched its new product line?

- Advertisement -


Please enter your comment!
Please enter your name here

Most Popular

Recent Comments