The Tesla (TSLA) stock price is regaining momentum, helped by the recent strong deliveries and the performance of Bitcoin and other cryptocurrencies. On Tuesday, the stock closed at $762, up by 42% from the lowest level this year. The company is now valued at more than $731 billion, making Elon Musk the second-richest person on earth, worth $194 billion.
Tesla helped by strong fundamentals and Bitcoin
Tesla has grown from a small struggling startup to the biggest automaker in the world by market value. The company is well-known for radically changing the electric vehicle industry, which is now believed to be the future of the sector.
Tesla’s revenue and deliveries have been rising recently. The firm saw its revenue soar from more than $7 billion in 2017 to more than $31 billion in 2020. It has also moved from making substantial losses to netting more than $700 million in 2020.
The company’s growth comes from the fact that it makes electric vehicles that customers love. The cars look good, and their software is upgraded regularly. Therefore, while there are other electric vehicle brands in the market, the company is the clear market leader.
Recently, the Tesla stock price has been rising after the company published strong Q1 deliveries numbers. The firm delivered 184,000 in the quarter, beating the analysts’ forecasts of 168,000. The numbers were higher than the 180,570 that it sold in the fourth quarter of 2020. This means that the company could deliver more than 850,000 cars this year, according to analysts at Wedbush Securities.
Meanwhile, Tesla’s stock price rose because of its bet on Bitcoin. Early this year, the company announced that it had acquired Bitcoin worth $1.5 billion. By doing this, the firm became one of the biggest holders of the coins.
This week, after weeks of consolidation, the price of Bitcoin surged to more than $63,000. This means that Tesla has made billions of dollars from its investment in cryptocurrency. Indeed, analysts believe that the firm will make more profits from this acquisition than in actually selling vehicles.
What next for Tesla?
Tesla is in good shape as the world economy rebounds from its slump in 2020. Indeed, the IMF expects that the economy will rise by more than 3% this year, led by China. At the same time, the coronavirus pandemic has incentivized people to move into private transportation.
Therefore, in my view, I suspect that Tesla will continue seeing robust sales this year. Furthermore, there is still unlimited access to credit because of the low interest rates in the United States.
Internationally, Tesla will likely keep seeing more sales, especially in China, where it has a major plant. The company is also expected to open its manufacturing plant in Germany, which is expected to lower the cost of Tesla cars in Europe. Today, Tesla sells cars in Europe that it has manufactured in the US, which usually raises costs. The company is also planning on rolling out sales in India, the second-most populous country.
Tesla stock price forecast
The four-hour chart shows that the Tesla stock price has rallied recently. This week, it managed to move above $720, which was the previous level of resistance. It has also moved above the 25-day and 15-day exponential moving averages (EMA) while the price is 14% below its all-time high. The Relative Strength Index (RSI) has also moved to the overbought zone. Therefore, in my view, it is just a matter of time before the company’s shares surge to an all-time high.