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Tesla stock could benefit if an auto maker licenses its self-driving technology.
Ina Fassbender/AFP via Getty Images
Tesla
stock hasn’t had a very good week—but Investors could be looking at a bounce if a couple of things go right.
Coming into Friday trading, Tesla (ticker: TSLA) stock was down 2.7% for the week, while the
S&P 500
and
Nasdaq Composite
were off 1.8% and 2.5%, respectively.
That right there explains at least part of why Tesla has had a bad week—the whole market is down. Tesla stock is more volatile than most and investors should expect it to rise and fall more than the market if there isn’t much stock-specific news to point to. That Tesla is down just a touch more than the Nasdaq should be considered good news.
Tesla stock also benefited over that span from
Nvidia
‘s (NVDA) blowout first quarter. Tesla and
Nvidia
have both become AI stocks for investors to play the artificial intelligence boom. Nvidia stock was down 4.8% this week through Thursday. That could be another reason Tesla stock is lower.
In midday trading Friday, shares were down 0.1% . Nvidia stock was up 1.7% and the Nasdaq Compostie was up 0.7%. It isn’t all the market.
There was some Tesla-specific news this week too. The National Highway Traffic Safety Administration opened an investigation into the loss of power steering in some Model 3 and Model Y vehicles.
It sounds serious and Tesla stock dropped 2.4% the day the investigation news broke, worse than the 0.3% drop in the S&P 500. But it really is typical for the auto business. Investigations precede recalls and millions of vehicles get recalled in the U.S. each year. Most amount to very minor issues that don’t impact shares of auto makers. Investors follow Tesla recalls and investigations more closely than they do
Ford Motor
(F) or General Motors (GM) because it’s Tesla and Elon Musk. Enough said.
Tesla has stopped falling on Friday, but good things need to happen for its stock to keep going up.
Future Fund Active ETF
(FFND) co-founder, and Tesla shareholder, Gary Black lists a few things he is watching for in the coming weeks. The start of Cybertruck deliveries is one. Tesla is due to share shipping Cybertrucks to customers just about any day now.
The bigger moonshot idea is a deal between Tesla and a major auto maker for Tesla’s autonomous driving technology. Tesla CEO Elon Musk said Tesla was talking about licensing its self-driving software on his company’s second-quarter earnings conference call in July.
These kinds of announcements have helped move Tesla stock. Tesla stock rose about 30% in the month following its late May announcement that
Ford Motor
(F) EVs could charge at Tesla superchargers. That announcement set off more announcements from other auto makers, essentially making the Tesla charging cord standard in North America. Setting a standard isn’t as important as the sales generated by Tesla’s charging network.
Many things impact stocks. Bulls always hope news breaks their way.
Write to Al Root at [email protected]
Source: https://www.barrons.com/articles/tesla-stock-price-e7b6a850?siteid=yhoof2&yptr=yahoo