Tesla Stock Prediction Is Not That Shiny. It’s Time to Sell Its Stock.
June 26, 2023
Tesla stock prediction has been less optimistic since the firm began tweeting from an official Twitter account devoted to artificial intelligence on Wednesday, intending to highlight how the EV maker’s AI projects may aid the company in the future. It’s also an argument for selling the shares.
Tesla’s stock has risen dramatically this year but is also extremely volatile. Over the last year, the stock has fluctuated between $102 and $315. The $213 difference is more than 100% of the average closing price throughout that period. For Apple (AAPL), the same approach returns around 40% of the average price.
When it comes to Tesla, it’s frequently obvious to understand why the stock is rising or falling. However, explaining why it moves so much for the provided cause is not always easy. Take a look at the most recent run. As of Thursday’s trade, Tesla shares are up roughly 42% since May 25. That day, two things happened. First, Nvidia (NVDA) shares rose 24% when the company reported that its AI-related business was performing significantly better than projected. Then, Tesla and Ford Motor (F) announced a partnership in which Ford drivers could utilize Tesla charging stations.
Both events and the new @Tesla_AI Twitter account solidified the impression that Tesla is more than simply a vehicle company, which is critical for Tesla’s value. Despite selling a fraction of the automobiles, Tesla is valued at around three Toyota Motors (TM). In addition to EVs, Elon Musk’s vehicle firm has its own dealership, a network of charging stations, AI-developed software to assist cars in driving themselves, and sells solar roofs, utility-scale battery storage goods, and even auto insurance.
Given Nvidia‘s 40% surge since its explosive quarterly report, optimism regarding AI is likely to account for a large portion of Tesla’s gains. That makes sense. However, there are certain constraints. Tesla stock prediction is that Tesla shares now trade for about 77 times 2023 estimated earnings, up from 25 times when Barron’s wrote positively about the stock early this year. Simply put, the AI frenzy has made the shares a little pricey for our tastes.
Wall Street is now seeing things our way. Analysts have downgraded Tesla twice in the last two days due to its current surge. Morgan Stanley and Barclays both changed their ratings from Overweight to Equal Weight. Both brokers blamed the stock’s value on the AI-related hype.
There are still car-related concerns, most notably Tesla’s second-quarter sales, which are scheduled to be released in early July. Wall Street anticipates around 445,000 cars shipped during the three months ending June 30, a record and an increase from approximately 423,000 vehicles sold in the first quarter. If Tesla exceeds those projections, the stock might increase much further. Miss, and be careful.
As a result, now is as good a moment as any to sell a small portion of your Tesla stock. We advised buying the stock on January 6, just after it closed at $113.06. Shares finished at $259.46 on Wednesday, up about 130% from the pick level. We’re not giving up on stocks. Just taking advantage of instability, hopefully. We’re also not concerned about losing a little money. When a stock doubles in value, an investor can sell half of their ownership and be left with the original position’s worth, plus some gains if things go south.
With a stock like Tesla, we think that’s a win-win situation.