Pondering over purchasing Tesla shares prior to January 20th?
Pondering over purchasing Tesla shares prior to January 20th?
Titled "Tesla's Turbulent Journey: A Potential Uptick on Jan. 20?"
Tesla (TSLA), the volatile megacap tech stock, has seen its fair share of ups and downs in 2024. While long-term investment in the company has generally paid off, timing has often played a crucial role. In this article, we explore the intriguing possibility of Tesla investors experiencing a resurgence on Jan. 20, 2025, but let's first delve into the company's yoyo-like performance in the past year.
Tesla's 2024 Stock Performance
The rollercoaster ride of Tesla's stock in 2024 started with a downward spiral, with the company's shares losing 2.3% between Jan. 1 and Nov. 4, trailing the S&P 500 significantly. The stock hit rock bottom at a 42.8% decline at one point during this period.
However, post-Nov. 5, with Donald Trump's victory in the U.S. presidential election, Tesla stock found a new lease of life. Gaining 66.3% between Nov. 5 and Dec. 31, Tesla reclaimed its spot in the trillion-dollar club.
Interestingly, Tesla started selling off post-Christmas, with shares down 14.3% since Dec. 24, 2024. Despite this downward trend, a rebound before Jan. 20 is beyond the realm of possibility for some experts, given the company's delivery and production figures that fell short of Wall Street's expectations for the fourth quarter.
The Why and the What of Jan. 20
Jan. 20, 2025, will see Donald Trump being sworn in as president. Tesla's association with Trump in the past may positively impact the company's stock, with Tesla CEO Elon Musk having expressed his support for the now-president-elect during the election campaign.
However, analysts caution that any potential gain leading up to the inauguration is based on a narrative, not Tesla's fundamentals. While a Trump administration's regulatory environment could be friendlier for Tesla's autonomous driving ambitions, the company's long-term vehicle and AI innovations should warrant attention regardless of the day on the calendar.
Should You Buy Tesla Stock Before Jan. 20?
The "Musk-Trump alliance" has driven investor enthusiasm in the past. With a potential favorable regulatory environment and increased demand for electric vehicles, the momentum might just carry Tesla's stock through Jan. 20.
However, Tesla stock, post the election, has been operating like a meme stock — a risky venture. Investors new to the scene should rely on their faith in Tesla's long-term vision, spanning AI, self-driving cars, and robotics. Don't let the day be your decision-maker; instead, your belief in Tesla's vision should guide your investment choices.
Revitalizing the input data, we see aspects of Tesla's stock performance in 2024 that influence its potential rise between Jan. 1 and Jan. 20, 2025.
- Advancements in Autonomous Vehicle Software: The ongoing developments in Tesla's fully autonomous vehicle software position the company for quicker regulatory approvals and heightened adoption of robotaxis.
- Regulatory Environment: Under a Trump administration, Tesla may enjoy looser regulations, bolstering demand for EVs and facilitating the rollout of self-driving technology.
- Political Influence: Elon Musk's ties with Trump, including his role in the newly formed Department of Government Efficiency (DOGE), could positively impact Tesla's position in the short term.
- Market Sentiment and Hype: The excitement and hype surrounding Musk's political role could drive short-term stake price increases, albeit with some analysts cautioning against its sustainability in the long term.
- Investor Confidence and Analyst Forecasts: Analysts like Daniel Ives of Wedbush and Vijay Rakesh of Mizuho Securities elevated their price targets for Tesla stock following favourable regulatory conditions and increased demand for EVs post-election.
- Competitive Landscape and Market Share: While facing stiff competition from other EV manufacturers, Tesla's innovative technologies and strategic positioning could maintain its market share and contribute to its growth.
- Economic and Broader Market Trends: Tesla's stock performance also relies on broader economic trends and market conditions, including general EV demand and the company's operational accomplishments.
Collectively, these factors point towards a bullish sentiment around Tesla's stock price, with some analysts expecting significant growth into 2025, albeit with cautionary notes about potential overvaluation and the need for Tesla to live up to its promises.
Investors may see an opportunity to invest in Tesla's stock due to its potential benefits under a Trump administration's regulatory environment, as mentioned by analysts like Daniel Ives and Vijay Rakesh. Moreover, the company's advancements in autonomous vehicle software and its strategic positioning in the competitive EV market could contribute to its growth.
Given the rollercoaster ride of Tesla's stock in 2024, where it experienced significant losses and comebacks, some investors might choose to wait and see if the company can maintain its momentum into 2025, rather than rushing to buy stocks before Jan. 20. Understanding both the potential upsides and downsides is crucial when it comes to making informed investing decisions in the world of finance.