Why Tesla Shares Were Rising Today
Tesla‘s (TSLA 2.58%) stock was moving higher today, likely as investors processed an analyst’s recent upgrade for the electric vehicle stock and after Cathie Wood-led Ark Investment Management added more Tesla shares to its portfolio yesterday.
The EV stock was up by 2.5% as of 2:55 p.m. ET Tuesday.
Yesterday, RBC Capital analyst Joseph Spak upgraded Tesla’s stock to outperform from sector perform and put a price target on the company’s shares of $1,100.
Spak thinks that Tesla has a competitive advantage over its peers because of its supply chain and vertical integration. He said in the investor note that “The company’s early focus on vertical integration (not just batteries/raw materials but also motors, semis, software) is likely to pay off.”
Spak also thinks that Tesla’s automotive margins could be higher than 30% in the second half of the year as the average selling price for its vehicles increases and the company’s Shanghai, Berlin, and Texas plants boost vehicle production.
In addition to the analyst’s positive comments, investors may be reacting to the fact that Ark Investment once again bought up more shares of Tesla. Ark Invest bought 2,800 Tesla shares yesterday, worth about $1.8 million, which marked the fifth time this month that the fund has added more Tesla shares to its portfolio.
Investors are worried about rising inflation, supply chain issues, and the potential for an economic slowdown in the U.S., all of which has sent Tesla’s share price on a wild ride over the past year.
But today’s gains show that despite all of the volatility in the market, many investors still have a long-term perspective on the EV maker.