Shares of the electric vehicle manufacturer Tesla (TSLA) experienced a 4.3% increase as of 2:34 p.m. ET, outpacing major market indexes. This rise follows reports of Tesla CEO Elon Musk advising employees during a recent meeting to retain their shares.
Encouragement to Invest Amid Decline
Following a significant rally after the election victory of President Donald Trump, Tesla’s stock has fallen approximately 35% this year. Musk is encouraging employees to maintain their investment, and officials in the Trump administration are also motivating investors to capitalize on the dip. U.S. Commerce Secretary Howard Lutnick, who has a background with the investment bank Cantor Fitzgerald, recommended on a Fox News interview that investors should consider purchasing Tesla stock.
Retail investors appear to be responding positively. Bloomberg has reported that retail traders have been net buyers of Tesla shares for 13 consecutive trading days, resulting in inflows of roughly $8 billion, according to data from JPMorgan Chase. This represents the most consistent buying spree of the stock since 2015.
However, CNBC has reported some less favorable news for Tesla, noting that customers have been trading in their new and used Tesla vehicles at unprecedented rates in March, based on data from car shopping company Edmunds. This trend involves consumers exchanging their Teslas for different brands at various dealerships.
A Contentious Stock
Tesla has emerged as a contentious stock within financial circles, with Wall Street analysts divided in their perspectives. Some investors express concern over first-quarter delivery figures, pointing to various data indicators. Meanwhile, other investors believe the potential of Tesla’s self-driving and robotics divisions is not yet reflected in the stock price.
Although these potential developments could eventually materialize, Tesla shares continue to trade at nearly 92 times forward earnings, suggesting the possibility of significant market movement when the company announces its first-quarter earnings. Therefore, some investors may opt to remain cautious for the time being.
