Tesla stock: From crisis to euphoria

Tesla stock (NASDAQ:TSLA) has been on some rollercoaster ride this year. It first fell by almost 45% before bottoming out in April at $142. Nothing changes investor sentiment as much as falling share prices, and it's safe to say that expectations for Tesla really hit a low point back in the spring.

But when expectations are low, sometimes all it takes is a 'little good news' for a recovery to begin. That's exactly what we've seen. There has been euphoria among Tesla investors since the automaker surprised with positive second-quarter delivery figures. Tesla reported deliveries of 443,956 vehicles, exceeding expectations of 439,000.

The share price has now risen by over 75% since the low point in April, and at just around $250, the losses since the beginning of the year have more than recovered. However, the wild rise cannot be attributed solely to the improved delivery of vehicles. There's something else at play.

We shouldn't underestimate Tesla's strong fan base, which has been fuelled in no small part by the stock's wild past performance. When the stock has positive momentum, many retail investors are ready to jump on board. Tesla is the most popular stock on the eToro platform. Many Tesla shareholders also have enormous confidence in the company's CEO. Among eToro users who voted ahead of Tesla's annual shareholder meeting in June, more than 80% were in favour of Elon Musk's stock option pay package worth a whopping $56 billion.

The wild price increases over a short period are almost reminiscent of meme stocks like Gamestop. There's just a huge difference. Tesla is the world's 10th largest company, with a whopping market capitalisation of $850 billion. In the last month alone, around $300 billion in market capitalisation has been added.

With that wild valuation, investor expectations are still huge. It's valued as a growth company, but there hasn't been much growth in the last year and a half. Tesla has tried to lower prices to increase sales figures, but it hasn't had the desired effect. Instead, it has lowered their otherwise high margins. There's no doubt that investors expect growth from here, so where will it come from?

There are many good ideas on the drawing board, from their humanoid robot, to fully autonomous software and their supercomputer Dojo, to Robotaxi. Investors are eagerly awaiting the Robotaxi event now pushed back to october. Here we will get to see more of Elon Musk's venture into self-driving taxis, which could prove to be a strong competitor to Uber (NYSE:UBER). But it could be a long road from presentation to launch.

A successful rollout of Robotaxi could be the growth generator that investors are looking for, but we should also consider the potential. Today, Uber's market capitalisation is around $150 billion — that's only about half of the increase Tesla has seen over the past month.

Jakob Westh Christensen, eToro Market Analyst