Tesla Stock Has Doubled Since April, Casting Aside AI Fears
Tesla stock is close to an all-time high thanks to strong investor confidence in the company's AI plans.
Quick overview
- Tesla's stock price briefly reached $481 before a slight drop, remaining elevated ahead of its January Q4 earnings report.
- The company has grown 6% recently, outperforming other tech stocks like Oracle and Broadcom, which are experiencing declines.
- Despite fears of an AI market bubble, Tesla is thriving due to strong investor confidence in CEO Elon Musk's vision for AI.
- Tesla's advancements in AI, including successful driverless car programs and plans for Optimus robots, contribute to its resilience in a bearish tech market.
Tesla’s (TSLA) stock price briefly hit $481 before dropping slightly on Monday. It remains elevated for Tuesday, and the company could dispel worries over the future of the AI market.
Growing 6% over the last few days, Tesla stock is close to a record high and is defying expectations for AI-focused stocks. While Oracle (ORCL) and Broadcom (AVGO) suffer this week from sharply declining stock values, Tesla is surging ahead of its January Q4 earnings report.
Tech stocks have been on a downward trend for weeks now, but Tesla has managed to pull away from the crowd thanks to growing excitement over the company’s plans for artificial intelligence. The stock did manage to beat its previous record high of $479 from last year but has since settled.
Why Tesla Is Outperforming Other AI Stocks
Fear for the future of AI stocks and the AI industry at large has been sweeping the stock market since the beginning of November. It was then that the IMF and the Bank of England began talking about an AI market bubble. Consequently, AI-related stocks began to retreat, and fear over artificial intelligence-focused companies increased from there.
Investors are worried that tech companies are spending more than they are earning on artificial intelligence. This fear has been exacerbated by several key quarterly earnings statements from Broadcom, Oracle, Advanced Micro Devices, and others that failed to improve investor sentiment. Despite rapidly increasing revenue, these companies are increasing their spending on research and development at a similar pace, cutting into their profits.
Tesla has managed to sidestep a number of those concerns it appears, thanks in part to CEO Elon Musk’s strong vision for the company’s future in AI. He has been promoting the company’s plans to the public since he returned to an active position with Tesla earlier this year. Tesla announced early production on Optimus robots that use artificial intelligence to perform a variety of tasks usually done by people.
The company has already proven that its AI programs are effective in its driverless cars. The launch of their robotaxi service in Texas and California was not without its bugs, but it has been enough of a success that Tesla has announced they will be expanding it to new cities soon.
Tesla is behind Musk’s plan for the company as well, since they recently approved a pay package amounting to about $1 trillion if he can meet specific criteria to improve the company’s stock value. That unprecedented payout agreement is further evidence that Tesla is an outlier when it comes to the AI market. Even with a bearish trend sweeping that market, Tesla seems immune and could even set a new record high soon.
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