Tesla Stock Poised for 12-Day Winning Streak Amid Cooling Inflation Data

Tesla Stock Poised for Continued Success: With an impressive 11-day winning streak under its belt, Tesla (TSLA) continues to showcase remarkable resilience and investor confidence. As the streak looks set to extend to 12 days, bolstered by favorable U.S. inflation data, the stage is set for further gains. This economic indicator has provided a positive backdrop for Tesla’s recent surge, with shares climbing an impressive 44% over the past 11 days. This performance underscores strong market enthusiasm and optimism about Tesla’s future prospects.

Key Factors Driving Growth

The company’s strong performance drove most of its growth, with backing from Wall Street. Better-than-expected vehicle deliveries and rapid expansion in Tesla’s battery storage business were major factors. Excitement about Tesla’s upcoming robotaxi event on August 8 also played a significant role. As a result, several analysts raised their stock price targets, boosting the company’s shares.

Tesla’s robust performance, supported by Wall Street, drove growth; vehicle deliveries and battery expansions crucial, according to Barron’s Print Edition.

Analyst Insights

As Thursday begins, there is minimal Tesla or electric-vehicle-specific news. Wedbush analyst Dan Ives mentioned in a report that a second term for Donald Trump as president might negatively impact EV sales but noted that Tesla’s scale and cost structure could help it capture market share in that scenario. His rating and price target remained unchanged; Ives rates Tesla stock a Buy with a $300 price target.

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Market Reaction to Inflation Data

Investors may need to rely on the market’s reaction to inflation data to further boost Tesla stock. Inflation was slightly below expectations, with consumer prices rising 3% year over year, compared to the 3.1% increase economists had predicted, and down from 3.3% in June.

Auto investors favor lower-than-expected inflation, as it might lead the Federal Reserve to cut interest rates sooner. This benefits all car manufacturers, including Tesla, since most buyers finance their vehicles, and higher rates reduce affordability for new cars.

Vehicle Affordability and Pricing Trends

Interest rates are just one aspect of vehicle affordability. Prices also matter. New and used car prices fell 0.9% and 10.1% year over year, respectively. While lower prices can impact automaker profits, the Government’s inflation data lags behind real-world experience, with car prices having been on the decline for months. Used car prices are down about 24% from their 2021 peaks but remain approximately 33% higher than pre-pandemic levels.

Stock Performance

Before the inflation figures, Tesla stock declined. After their release, it reversed, rising 1.6% to $267.37 on Thursday. Both the S&P 500 and Dow Jones showed slight gains. Tesla’s stock has rebounded, up 6% this year after a 44% drop in late April.

Investors and analysts alike closely watch Tesla’s stock trajectory as the market reacts to economic data and company-specific developments.

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