Tesla has been one of the wonder stories linked to high valuations despite a mismatch in delivery of its end-product and profits. The valuation is based more on the expectation of achieving a number one monopolistic position in the race for sustainable transportation and storage.
The Tesla Stock has seen bouts of corrections owing to
- Promoter (Elon Musk’s) tweets
- General Market Correction
- Fall in the output owing to supply chain & semiconductor disruption
- Pursuit of Twitter Acquisition by the promoter leading to questions about stock dilution and returns
Owing to these reasons, we are saying statements like these from the Investment Banks
Also, peers in the category like Chinese Major – NIO are meeting their delivery deadlines and are scaling but are susceptible to US-China Trade War, and sanctions(if any) are applied to Chinese entities listed in the US.
The stock out of sheer speculation has been hammered throughout the past year.
The situation has not been rosy for other US electric & hydrogen based auto manufacturers like Rivian(backed by Amazon) and Nikola
Considering all this, it is best to follow the approach stated below
- Wait for the Federal Reserve’s next round of rate hikes
- Wait a quarter for prices in Tesla to correct by 7–10%
- Wait for the semiconductor supply chain to be smoothened out
Once these conditions are met, try to buy into the stock in a staggered manner. Do not commit a huge sum in one go. This should assure upside gains. Also, do your personal due diligence from your end to see if the valuation and money commitment match your long-term goals.
Hope this helps
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- Risks to Tesla stock are piling up and investors should prepare for less upside ahead as ‘disruption from inside’ and a wave of negative headlines weigh on shares, says Jefferies
- Global recession can stay for up to 18 months, says Tesla CEO Elon Musk
- Elon Musk’s 420-Degree Edgelord Pivot Is Getting Stale
- Nikola stock jumps as EV truck maker reports start to production and surprise Q1 revenue
- Rivian Shares Gain on Shake-Up at the Top; New COO and Organizational Shifts
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