After some beastly earnings reported by Tesla (TSLA) in Q4, many investors are licking their lips at the idea of picking up shares in this EV (electric vehicle) stock at current prices. However, many argue that Tesla was massively overvalued to begin with.
So is this a fool’s buy or a Foolish (with a capital F!) investment? To give you an insight into the latest developments, I’m going to reveal the latest trading data for these shares. I’ll also explain what the future may hold and how you can invest.
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What’s the latest development with Tesla (TSLA) stock?
Lately, we’ve seen a wide tech sell-off in the stock markets, mostly driven by rising inflation and the prospect of higher interest rates incoming for the US.
Tesla’s share price has taken a hammering as part of this rotation out of high-growth investments. Alongside general market troubles, Tesla has also been suffering from supply chain issues that have put a squeeze on most manufacturers.
However, the market-leading EV company came out with some whopping earnings in its recent Q4 results. This came despite the ongoing issues around production. As a result, many investors and analysts are making sure they’re not overlooking this business.
How did investors react to this positive Tesla news?
With revenue up 65% year-on-year and a deflated share price, Tesla once again grabbed the attention of investors.
According to the latest data from Saxo Markets, investors were piling into Tesla stock. Upon hearing about the positive Q4 results, investors were buying up 150% more shares than they were the previous day.
Mike Owens, global sales trader at Saxo Markets had this to say about the surge in interest: “Tesla proved once again that it is leading the electric vehicle market not only in innovation but on a financial level too.
“Elon Musk’s company announced some impressive returns on estimations, particularly considering the limitations the industry has seen with chip shortages, supply chain delays and higher production costs.”
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What lays ahead for Tesla stock?
Although Teslas Q4 results were great news, the company’s share price kept sliding. But many investors are confident that these solid financial results are a good indicator for future share price increases.
However, Mike Owens believes that investors should act with caution. He points out that moving forward, Tesla faces some key hurdles:
- More competition than ever before from the likes of Lucid (LCID) and Rivian Automotive (RIVN)
- Ongoing supply chain issues are still causing long delays
- Tesla is one of many tech stocks that are having a tough time in the current climate
Owens’ personal view is that: “for the world’s biggest electric vehicle firm to see the share price surges of previous years, it will take a lot more than positive financial projections.”
How can you invest in Tesla stock?
If you’re considering buying shares in Tesla, there are a couple of important points to consider. Firstly, you need a share dealing account that provides access to international markets. Ideally, find a brokerage that offers cheap purchases for US stocks.
Secondly, it’s worth considering an account such as the Saxo Markets Stocks and Shares ISA. This is because if Tesla does go on to see more monster gains, you won’t have to pay tax on your returns.
Just remember that all investing carries a certain level of risk. You may get out less than you put in. So, make sure the rest of your finances are looking healthy first. It’s also a good idea to create a diversified portfolio rather than investing in just one stock.
