GM - Tesla Stock: No Longer An Obvious Sell

2024-04-01 14:34:01 ET

Summary

• When I last covered Tesla, Inc., I provided fairly bearish commentary, on the grounds that the company's margins were likely to shrink due to increased competition.
• Since then, the company's margins have shrunk, but it has made progress on "full self-driving, or FSD.
• FSD is unlike any of the other autonomous car projects currently underway: it aims to make Tesla EVs completely autonomous even in novel environments.
• If FSD can achieve mass release, then it will give Tesla a major differentiator and possibly ramp up its growth.
• In this article, I explain why I believe those shorting Tesla today are taking a bigger risk than longs are.

Tesla, Inc. ( TSLA ) is the rare big tech stock that hasn’t yet retaken its COVID-era highs. Peaking at $407 in 2021, it has underperformed the broader indexes. For those who bought at the top, the return has been -57% . This is really remarkable because the S&P 500 Index (SP500) – of which TSLA is a part – is up 10.5% during the same period of time. The tech-heavy NASDAQ (COMP.IND), of which Tesla is also a part, is up 9.9% during that time period....

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