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Tesla (NASDAQ: TSLA) was Wednesday’s winner among S&P 500 index gainers, capturing the title with a more than 4% increase to its stock price on the day. There was little news of note driving the stock forward; rather, it seemed that bargain hunting and a somewhat cryptic tweet from CEO Elon Musk propelled it higher.
A maturing market
While it’s fine to be a leading company in an industry when times are frothy, the downside is that such a business can be a poster child when the bad days roll around.
Sentiment on the electric vehicle (EV) sector is still gloomy in many quarters, as it matures and the novelty of EVs prowling our streets wears off. Economic concerns in recent months, mainly about inflation, have fed into this, leaving purveyors of high-end products like Tesla vulnerable.
Aggressive price cuts by the company and rivals have helped contain the damage, but the EV sector is not currently the darling it was at the kickoff of this year.
Star investor Warren Buffett famously said that investors should be bold when others are fearful, and that sentiment might have had something to do with Wednesday’s Tesla pop. It has been a seesaw stock over the summer and is down notably from its midseason price. For any large, publicly traded company, there are always plenty of bargain hunters sniffing around for price weakness.
The rise of the robots
Compounding that, more than a few Tesla watchers were surely cheered by Musk’s latest utterances on X (formerly Twitter). Responding to a tweet Tuesday night asking how he was feeling, the company’s CEO responded — apparently upon exiting Tesla offices in Palo Alto, California — “Mostly good, some bad.”
Although that lacked specifics, Musk did add a note of excitement by tacking on: “The future is going to be wild. There will be so many robots …” Tesla is one of the more active developers of robots, and the market probably took this as a reaffirmation of that commitment.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
Why Tesla Stock Accelerated on Wednesday was originally published by The Motley Fool
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