Market participants have seen most market dips as buying opportunities for months now, and Thursday morning was no different. As has happened repeatedly during 2020, the Nasdaq Composite (NASDAQINDEX:^IXIC) managed to outpace the rest of the stock market, with the index climbing two-thirds of a percent by 11:30 a.m. EST.
Tesla (NASDAQ:TSLA) has been one of the biggest stories in the Nasdaq this year, and today brought yet another chapter to the electric vehicle pioneer's story. Meanwhile, investors are waiting with bated breath for the IPO of Airbnb (NASDAQ:ABNB) to become available, but they'll have to pay a pretty penny in order to get in if early indications are correct.
Tesla drives higher despite Wall Street worries
At first glance, there didn't seem to be anything particularly unusual about Tesla's modest gain of 1.5% on Thursday morning. The Model 3 maker has been on an upsurge for months now, punctuated only by brief pullbacks before renewing its upward trajectory.
Yet what's noteworthy about the move today for Tesla is that it came in the wake of downbeat comments from Wall Street. Analysts at New Street Research cut their rating on the stock from buy to neutral, leaving their price target of $578 in place.
New Street believes that Tesla's long-term prospects are still strong. The analysts even believe that the stock will continue to appreciate in the long run, with a target of $1,200 per share by 2025. Yet despite that rosy outlook, New Street thinks that the huge price rise in Tesla shares has already gone as far as it can in the short run.
The comments come on the heels of even more bearish Tesla calls Wednesday from J.P. Morgan, where analysts set a price target of $90 per share. J.P. Morgan believes that investors shouldn't give Tesla the same weight as the stock will get when it joins the S&P 500 Index on Dec. 21, calling the shares "dramatically overvalued." Yet Tesla shares have defied similar calls in the past, and they're doing so again today.
Airbnb set to climb into rarefied air
Airbnb shares hadn't yet opened for trading as of 11:30 a.m. EST. However, all indications suggested that the vacation rental website platform would get a huge IPO lift once the stock became available.
Airbnb has already seen a big run-up in its anticipated price. After setting an initial range of $44 to $50 per share, Airbnb upped that range to $56 to $60 per share earlier this week. The IPO ended up closing at $67 per share, which many already saw as above what they were willing to pay.
Yet based on early estimates from stock traders, Airbnb is likely to open at around $145 per share. That'd mean that the company would have left a huge amount of money on the table -- just as we saw from fellow IPO stock DoorDash (NYSE:DASH) on Wednesday.
Vacation rental has gotten a big boost from the COVID-19 pandemic, because traditional hotel accommodations are crowded and make it more difficult to isolate from others. With the potential for a $100 billion market cap right out of the gate, though, Airbnb will have to keep growing dramatically for years to come in order to satisfy investors.