Shares of Tesla closed at an all time high of $1544.65 today, up over 50% in the past month.
It certainly is no secret that lately Tesla's stock has been on a relentless path upward, with shares closing today at $1,544.65, up nearly 11%. Just in this last month, Tesla stock has increased over 50%, putting the companies market cap at just over $286 billion. To put that in perspective, Tesla is now worth more than Ford, Nissan, Volkswagen, General Motors, and Honda combined.
So how much longer will Tesla's stock continue to rise? It certainly is in a bubble, however that bubble might have some more room to expand as Tesla still has two weeks to go until their scheduled earnings report on July 22.
What makes quarterly earnings report special? Analysts expect it to be the fourth consecutive quarter Tesla reports profits, thereby finally making it eligible to enter the S&P 500. Tesla has meet the market cap requirements for awhile to enter the S&P 500, however companies need four consecutive quarters of profit to enter the prestigious list of the 500 most valuable companies. There is much speculation that the price of Tesla's stock has been ballooning in anticipation of these earnings, as companies that typically gain entry into the S&P 500 see their stock price skyrocket shortly after.
Our thoughts? It looks like Tesla will continue to grow at least until earnings because of speculation and anticipation, however it would be advisable not to hold the stock long after earnings. Why? The demand for cars in general has dwindled substantially amid the pandemic, and while Tesla is still flashy, it is not selling enough cars to justify its stock price, something that will seriously be evaluated once the speculation dies down after earnings, as it usually does.