Tesla Soars Amid Q2 Success, Market Watching for Future Updates

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Tesla is facing growing competition, yet this has done little to halt a massive rally in the company’s stock price, which has erased year-to-date losses. The rally has quieted, for now, questions about whether Tesla still deserves its place in the so-called Magnificent Seven—a term inspired by the movie that refers to tech giants like Alphabet, Amazon, Apple, Meta, Microsoft, and Nvidia which have driven the stock market’s gains in recent years.

Earlier in April, Tesla shares fell to a low of $138.80, barely holding onto its position among America’s top 10 largest companies. Financial pundits, such as CNBC’s Jim Cramer, even suggested that Tesla had lost its status among the most powerful and fastest-growing companies in the country.

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However, Tesla’s Q2 deliveries exceeded low expectations, sparking a continued rally. As of Wednesday, shares reached their highest level since September, closing at $263.26. Tesla’s market capitalization now nears $850 billion, making it the eighth-largest U.S. company—though still trailing Meta’s $1.3 trillion market cap, the next smallest member of the Magnificent Seven.

Interestingly, Tesla enthusiasts view the company as an artificial intelligence leader, but it must still demonstrate an ability to sell cars. According to a New York Times report citing Cox Automotive, Tesla no longer controls a majority of the American EV market.

Seth Goldstein, an equities strategist at Morningstar, noted that focusing solely on Tesla’s EV market share was never a good idea. With increasing overall demand for electric vehicles, Tesla’s market share might drop even if the company continues to grow. “The more important number is, what are their deliveries and what’s their percent of the total auto market, including internal combustion engines?” Goldstein remarked.

At the start of the month, Tesla announced it had delivered nearly 444,000 vehicles in Q2, a nearly 5% drop from last year. Analysts had estimated a 9% drop. Goldstein was impressed not only by the deliveries but also by Tesla’s energy storage business, which reported deploying 9.4 gigawatt hours of battery energy storage—the highest quarterly number yet and more than double Q1’s amount. According to Goldstein, even small changes in expectations can significantly impact the stock prices of high-growth companies.

“That shows that Tesla can still grow,” Goldstein said. “It shows that maybe the worst is behind Tesla, and that they are turning things around.”

Investors are also eagerly awaiting August 8, when Tesla is set to reveal its Cybercab. Expecting this robo-taxi model to lack a steering wheel and pedals, Goldstein is curious whether Tesla will provide a concrete timeline or remain vague.

In the nearer term, attention is on Tesla’s next earnings call on July 23, where investors hope for updates on the production of a new, more affordable vehicle. Musk has indicated that production could start as soon as 2025, potentially allowing deliveries to grow again by 2026. Goldstein suggested that the market would respond positively if this timeline remains intact. “If they don’t commit to it again or give us any updates,” he said, “we could see the stock falter.”