Tesla Stock Rebounds Nearly 30% in Five Days as "Musk Faith" Trumps Earnings Uncertainty

TradingKey — Despite Tesla’s European sales plunging over 40% for two consecutive months and its stock price being halved earlier this year, investors continue to place their faith in Elon Musk. Embracing a “buy the dip” mentality, they have driven Tesla shares up approximately 30% over the past five trading days.

On March 25, Tesla (TSLA.US) rose 3.50%, leading gains among the "Magnificent Seven" tech giants, closing at $288.14. The stock has now climbed for five straight sessions, posting a 28% cumulative gain, though it remains down 28.65% year-to-date.

Recent data shows Tesla’s new car registrations in Europe fell 40% year-over-year to 16,888 units in February, with sales plummeting 43% over the first two months of 2024. This sharply contrasts with a 28.4% increase in overall European EV sales during the same period.

Still, Barron’s reported that investors may not be surprised by another weak month for Tesla in Europe.

While Tesla’s stock continues to face multiple challenges—including protests over Musk’s political activities, slowing sales, and rising competition— market pessimism appears to be gradually easing. This sentiment shift is reflected in improving consumer purchase intent and renewed bargain-hunting by retail investors.

A Canaccord survey found that nearly two-thirds of respondents are now more willing to buy a Tesla compared to a year ago. Meanwhile, 21% expressed reluctance, with 80% citing political concerns as the primary factor.

In capital markets, JPMorgan revealed that retail investors have net-bought Tesla shares for 13 consecutive trading days through last Thursday, March 20, totaling $8 billion—the longest buying streak since records began in 2015.

Though Morgan Stanley analyst Adam Jonas recently lowered his price target for Tesla, he maintained a Buy rating, arguing that weak short-term weakness is unlikely to derail the broader narrative for a company whose premium valuation is anchored in robotics and AI.

Analysts at Wedbush echoed this sentiment, stating that if Elon Musk continues to execute on his vision, Tesla shares could resume a strong upward trajectory, with 90% of its valuation driven by autonomous driving and robotics technologies.

From a technical perspective, analysts noted that further upside momentum would not be surprising, identifying the 200-day moving average as the next key resistance level, followed by $320 as a critical watch point.