Shares of the electrical vehicle manufacturer, Tesla Inc., rose almost 20% on Tuesday, rebounding from a deep sale with its biggest daily gain during a year after data showed an increase in sales in China and the analyst lifted its stock rating. Tuesday’s Tesla rebound was followed by a 3.7 per cent rise in Nasdaq, as the US bond yields declined and investors picked up battered technology stocks. Tesla was the biggest contributor to the 1.4% surge in the S&P 500, which it joined in December 2020.
The leap, which added more than $100 billion to Tesla’s market capitalization, put an end to a five-day losing streak for the Nasdaq business in a recession in which investors frightened by increasing interest rates, had dumped growth stocks with heady valuations. New Street Research analyst Pierre Ferragu lifted his Tesla recommendation to “buy” from “neutral” and raised his target price from $578 to $900.
Tesla’s stock ended at $673.58 after the biggest daily surge since February 2020. Stocks are also down more than 20% from their record peak in January. Traders exchanged almost $43 billion worth of Tesla shares, more than any other stock and almost triple the second most-traded firm, Apple, according to Refinitiv’s results.
“As very much like the market has severely corrected the recent excesses of optimism expressed in Tesla’s valuation, our recent work has improved our trust within the company’s strong outlook over the next two years,” Ferragu wrote to the client. In February, Tesla sold 18,318 Chinese-made vehicles from 15,484 in January, said Chinese auto industry body CPCA.
Tesla is the largest holding company of ARK Innovation, which is common with retail investors. The ARK Innovation Fund increased by 10% on Tuesday. Tesla’s stock has stayed around 70% higher over the last six months. According to Refinitiv, thirteen analysts have Tesla neutral ratings, while 12 recommend buying and 10 recommend selling.
