‘Unprecedented’: Tesla shares more than double from January low

Shares in Telsa have skyrocketed, capping off stunning six-week rally which has seen the electric carmaker more than double in value since January.

Shares in Telsa skyrocketed again on Thursday, capping off stunning six-week rally which has seen the electric carmaker more than double in value since early January’s eye-watering plunge.

Tesla shares were up more than 6 per cent at one point in New York before closing the day on Wall Street up 3 per cent at $US207.32, marking a 104 per cent gain from their January 6 intraday low.

“Tesla shares are experiencing an unprecedented surge in demand, and to a lesser extent, so are artificial intelligence-related stocks like Nvidia and C3.ai, as well as the rest of FAANG group,” Vanda Research’s Marco Iachini said in a note on Thursday.

“If flows into cash equities sustain the current pace, we believe there is scope for the more speculative retail traders to pick up the slack in the options market too — where activity has been muted over the last year.”

Tesla owner Philip Benassi at a charging station in Norway. Picture: Petter Berntsen/AFP

Tesla’s stunning recovery — which comes after chief executive Elon Musk saw his net worth plummet by a record $US200 billion when the carmaker’s stock price plunged 65 per cent in 2022 — is being fuelled by easing concerns about future Federal Reserve rate hikes, and signs of rebounding demand for electric vehicles.

“Tesla is rising so fast because of a market that believes the Fed is coming to the rescue,” Eric Schiffer from private equity firm Patriarch Organization told Bloomberg.

Mr Schiffer added that Tesla’s good fourth-quarter results and “price cuts to turbocharge demand” also helped.

Earlier this month, the Biden administration announced expanded tax credits for electric vehicles, further fuelling optimism.

The rise in Tesla coincides with a rebound in the broader market. So far this year the tech-heavy Nasdaq 100 Index is up 13 per cent, while the broader S&P 500 is up 7 per cent.

That has been further fuelled by a frenzy of speculative trading in recent weeks as retail investors rush back into some popular stocks such as Tesla, which Mr Iachini described as “an ultimate retail favourite”.

Vanda Research said fear of missing out and “momentum remain the main drivers of flows, meaning that retail investors remain susceptible to negative catalysts”.

“That said, should macro conditions remain favourable in the near term, we do not exclude a continuation of speculative activity in AI-related stocks or other niches of the market,” they wrote.

Tesla chief executive Elon Musk. Picture: Marlena Sloss/Bloomberg

Vanda Research noted that in the last week, Tesla drew a 24 per cent share of single stock purchases and 33 per cent of overall net purchases across all US securities.

They suggested investors may be “chasing momentum in the stock aiming to recoup 2022 losses”, but also noted hopes were building ahead of Tesla’s March 1 investor day.

Mr Musk is set to lay out his “Master Plan 3” for the company, which will focus on increasing the capacity of the supply line and overall increase the production of new vehicles.

Despite the rally, Tesla’s shares are still down 49 per cent from their all-time high of $US409.97 in early November 2021.

And some analysts believe its share price is showing signs of excessive buying, suggesting a decline is imminent.

Mark Newton of Fundstrat Global told The Australian Financial Review that Tesla’s stock may be nearing resistance levels, which he put between $US200 and $US215.

“Most of my technical work suggests a short-term peak should be in place next week,” he said.

“While I respect [Tesla CEO Elon] Musk and his vision, accomplishments and future plans, and I’m fond of Tesla cars, I can’t own the stock here between now and May. I’ll look to consider buying Tesla on weakness over the next couple months, but frankly don’t mind missing out if I’m wrong at current levels.”