Tesla Shares Surge After "Not as Bad as Feared" Earnings Report
Quote from VATcal on 25/04/2024, 19:51Despite missing analyst expectations for both revenue and earnings for a third consecutive quarter, Tesla's share price rose significantly in after-hours trading on Tuesday. The electric vehicle (EV) giant's stock jumped over 10%, defying pre-earnings pessimism.
While Tesla did report an 8.5% decline in deliveries earlier in April, alongside rising inventory levels and global price cuts, investors appeared to take solace in the fact that the results weren't as catastrophic as some had feared. The company is still down 42% overall in 2024, but Tuesday's after-hours surge offered a glimmer of hope.
Several factors may have contributed to the positive reaction. Tesla announced plans to accelerate the launch of more affordable cars, potentially addressing concerns about cooling demand for high-end EVs. Additionally, CEO Elon Musk reiterated the company's commitment to self-driving car technology, a key area of future growth for Tesla. Musk even unveiled plans for a robotaxi service, similar to ride-hailing apps like Uber, but utilising Tesla vehicles.
Cathie Wood's Ark Invest, a firm known for its bullish stance on disruptive technologies, continued its aggressive buying of Tesla shares despite the earnings miss. This act of confidence from a major investor likely bolstered market sentiment.
However, analysts remain cautious. Tesla acknowledged that growth in 2024 is likely to be "notably lower" than previous years, and the company is still navigating a period of transition between growth waves. The broader economic slowdown and potential interest rate cuts from the Federal Reserve also cast some uncertainty over future performance.
Despite missing analyst expectations for both revenue and earnings for a third consecutive quarter, Tesla's share price rose significantly in after-hours trading on Tuesday. The electric vehicle (EV) giant's stock jumped over 10%, defying pre-earnings pessimism.
While Tesla did report an 8.5% decline in deliveries earlier in April, alongside rising inventory levels and global price cuts, investors appeared to take solace in the fact that the results weren't as catastrophic as some had feared. The company is still down 42% overall in 2024, but Tuesday's after-hours surge offered a glimmer of hope.
Several factors may have contributed to the positive reaction. Tesla announced plans to accelerate the launch of more affordable cars, potentially addressing concerns about cooling demand for high-end EVs. Additionally, CEO Elon Musk reiterated the company's commitment to self-driving car technology, a key area of future growth for Tesla. Musk even unveiled plans for a robotaxi service, similar to ride-hailing apps like Uber, but utilising Tesla vehicles.
Cathie Wood's Ark Invest, a firm known for its bullish stance on disruptive technologies, continued its aggressive buying of Tesla shares despite the earnings miss. This act of confidence from a major investor likely bolstered market sentiment.
However, analysts remain cautious. Tesla acknowledged that growth in 2024 is likely to be "notably lower" than previous years, and the company is still navigating a period of transition between growth waves. The broader economic slowdown and potential interest rate cuts from the Federal Reserve also cast some uncertainty over future performance.
