Recent Predictions on Tesla Shares Prove Accurate

Tesla's stock has recently reached $390 per share. In October, a prediction was made that Tesla would hit $1000 by the end of 2025 and eventually reach $2500 by the end of 2027. A more recent forecast from November stated that the stock would climb to $450 by February 8, 2025. It is important to note that this information is not intended as financial advice.

On October 23, 2024, it was suggested that the impressive Q3 earnings signaled the beginning of a significant increase in Tesla's stock price. The expectation was that over three years, these shares could increase tenfold. The prediction made in early October for Tesla to reach $1000 by the end of 2025 seems to be on track. Since October 23, the stock has increased by $110, moving from $213 to its current price, representing a substantial gain of 50%. However, stocks can be volatile, so it's essential to remain cautious.

In November, the outlook was reinforced with the belief that Tesla would reach $450 per share by early February of 2025.

Market Trends and Production Growth

The overall trends in the market, along with Elon Musk's close ties to the U.S. President, are contributing factors to this positive outlook.

This situation represents what some may call a "MELT UP," contrasting with the significant decline—known as a "MELT DOWN"—that saw Tesla's stock drop to around $110 two years ago. The previous downtrend was characterized by genuine challenges, including growth challenges and shrinking profit margins. Currently, margins have rebounded to nearly 20%, with Q3 margins recorded at 19.3%. Predictions suggest margins could exceed 20% in Q4. Additionally, car production is on the rise, anticipated to surpass 500,000 cars by the end of Q4. Notably, the introduction of higher-priced models like the Cybertruck is expected to further boost profits, with pricing expectations at around $80,000—double that of the Model Y. This could potentially yield over double the profits compared to the Model Y.

Institutional Investment and Market Activity

In terms of immediate trading strategy, it appears that large institutional funds are currently underweight in Tesla holdings. As they seek to equalize their positions, a considerable volume of buying activity is anticipated. Furthermore, there may also be a short squeeze and gamma squeeze, a market phenomenon where heavy buying of call options prompts market makers to buy the underlying stock. This spike in call option trading is significant, especially as Tesla regains its status as a leading stock in the market, dominating options transactions across the board.

Tesla, stocks, predictions, investment