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- According to an analyst, Ford and other old-guard competitors will continue to produce more EVs.
- A breakneck rally that began in late April has helped the tech giant's stock to soar 109% by 2023.
- Goldman Sachs, Morgan Stanley and other Wall Street giants warn that the stock is now overvalued.
According to an analyst, Tesla's largest stock rally since 2020 may soon come to a halt when investors realize how much competition they'll be facing in the electric car space.
Craig Irwin, a partner at ROTH Capital Partners, said on Thursday that he is skeptical about the ability of the Elon Musk led tech giant to maintain its share price in the long term. This is because traditional automakers such as Ford and GM are ramping up production of electric vehicles.
He told Yahoo Finance that he had maintained his long-term bearish stance. "It is a great company. They played a major role in the transformation of transportation. But you have 100 new EVs on the market."
Ford and General Motors are two of the big names that have been coming out with some pretty compelling cars that will make it difficult for Tesla to continue to achieve the growth and margins that they've achieved in the future.
Tesla's shares have risen 109% since 2023. This is the largest six-month gain in Tesla stock since 2020. The shares have benefitted from an AI-driven rally in Big Tech and investors' perceptions that CEO Musk is focusing on growing the EV Company since he hired Linda Yaccarino as Twitter, which he owns.
Goldman Sachs Morgan Stanley and Barclays all urged investors to profit from the rally that has occurred over the last fortnight. They lowered their rating of the stock to "hold" from "buy".
Irwin stated, "I look at Tesla and I think it is egregiously undervalued."
Analysts say that even the AI trade which helped tech mega-cap stocks to stage a huge rally in 2023 is unlikely to maintain Tesla's current stock price, because its much-vaunted autonomous technology will take years to boost its earnings.
Irwin said to Yahoo: "It is beautiful that they are pushing to develop technology. I think others will be more cautious in introducing new products to the market."
He added that Tesla's profit potential from AI is limited, for the time being.
Read More: Tesla's stock's best run in 2020 is spoiled by Wall Street downgrades. Goldman Sachs and Morgan Stanley warn of overvaluation risks
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By: gglover@insider.com (George Glover)
Title: Tesla stock’s sizzling rally won’t last as old-guard rivals like Ford and GM pile into the EV space, analyst says
Sourced From: markets.businessinsider.com/news/stocks/tesla-stock-price-elon-musk-ford-gm-wall-street-roth-2023-6
Published Date: Fri, 30 Jun 2023 10:03:40 +0000
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