Why Tesla Stock Is Up By More Than 5% Today

Tesla Stock Is Moving Towards All-Time Highs

Shares of Tesla gained upside momentum and moved towards the $1,200 level after Elon Musk tweeted that Model S Plaid would probably come to China in March.

The general market sentiment, which remains bullish, provided additional support to Tesla stock. S&P 500 is trading at all-time high levels, and investors’ appetite for risk remains strong.

It should be noted that the market remains focused on leading tech stocks like Apple, Microsoft and NVIDIA which are trading at record highs today. The current rally is not broad as traders are concentrated on a handful of mega-cap stocks, and this environment is bullish for Tesla.

What’s Next For Tesla Stock?

Tesla stock has easily found buyers near the $1,000 level after the recent pullback, which was caused by Musk’s sales of stock. The market has easily absorbed those sales, which indicates that demand for the Tesla stock remains strong.

Meanwhile, analyst estimates continue to move higher. Currently, analysts expect that Tesla will report earnings of $6.06 per share in 2021 and $8.17 per share in 2022, so the stock is trading at $147 forward P/E. However, traders do not look worried about the extremely high valuation of the stock as they rush to bet on the future of the electric vehicle market.

I’d note that shares of Tesla’s emerging competitor Rivian Automotive have declined from the $179 level to the $115 level in just four trading sessions on valuation concerns after the huge rally, but it remains to be seen whether such concerns will hurt shares of Tesla which, unlike Rivian, is making thousands of cars.

All in all, Tesla stock has a good chance to get to the test of all-time highs near $1245 in case the general market stays bullish as demand for fast-growing tech stocks remains very strong and traders are ready to ignore valuation concerns.

For a look at all of today’s economic events, check out our economic calendar.