Tesla bulls ride again: Morning summary

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If Tesla ( TSLA ) can be a tech company when car sales fall, it can certainly be a car company when sales beat expectations. That’s how Wall Street sees Tesla bulls rebounding.

Tesla shares have soared more than 25% in the past week, driven by vehicle deliveries that beat estimates and dwarfed the meager gains of other “Magnificent Seven” companies.

When CEO Elon Musk insisted earlier this year that Tesla is not a car company, the news boosted share prices even as sales fell. Although comfortable, the pitch was true. And the mandate apparently goes both ways.

The lesson for AI startups — and the benefit of making AI ambitions part of a broader business plan, rather than its sole feature — is that the stock boom speaks to the power of an industry-leading product. But in contrast, it underscores that Tesla’s lofty AI goals are still closely tied to its car sales.

Coupling lofty techno-ambitions with highly mobile cars is key to Musk’s sales potential.

“In short, Tesla’s bad in the rear-view mirror, we believe the EV demand story is starting to turn to a disruptive technologist,” Dan Ives, an outspoken Tesla supporter of Wedbush Securities, wrote in a note earlier this week.

Upbeat delivery data counters the tide of negative sentiment.

Tesla has been a Magnificent Seven underdog, driven by fierce competition in China, declining demand at home, price cuts, layoffs and Musk’s legal and corporate drama. But recent successes have a way of erasing previous failures. Tesla is riding a string of wins right now, with an earnings report and the much-hyped Robotaxis just around the corner.

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Investors buy in a dynamic mood. Since its lows in late April, Tesla is up more than 60%.

But even some Tesla supporters are poking fun at the recent rally. It’s true that Tesla beat expectations, but sales were down during the same period last year. And how have more aggressive competitors and cheaper prices hurt profits?

“In fact Tesla EV sales are down 5% and it looks like the company is giving up on the idea of ​​selling EVs. It’s all about FSD and taxis now. Rose Gerber saidGerber, CEO of Kawasaki Wealth & Investment Management, mentions fully self-driving.

In some ways, Tesla’s flexible identity of being a car company when times are good and a tech company when the chips are down may be a hindrance to a clear corporate strategy. Is Tesla still gunning for a mass-market EV in every family’s driveway? Or a crowd-funding platform for autonomous taxis that expands the horizons of AI technology?

It can certainly be both. And there’s a chance that Musk likes everything. Investors don’t care what metaphorical hat the company is wearing on any given day. Just until the number goes up. AI can do that. And, for now, cars can too.

Hamza Shaban is a correspondent for Yahoo Finance, covering markets and economics. Follow Hamza on Twitter @hshaban.

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