Please ensure Javascript is enabled for purposes of website accessibility

Why Tesla Stock Skyrocketed Today

By Joe Tenebruso - Mar 9, 2021 at 11:48AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Analysts and investors are growing more bullish about the EV leader's growth prospects.

What happened  

Shares of Tesla (TSLA -6.42%) surged on Tuesday, as the electric vehicle maker's stock price rebounded sharply from its recent lows.

As of 11:25 a.m. EST, Tesla's stock was up more than 12%.

So what

Following positive developments on the COVID-19 vaccine front, investors have rotated out of high-priced growth stocks that have performed well during the coronavirus crisis and into more bargain-priced stocks that could benefit from a post-pandemic economic recovery. Tesla was caught up in this rotation. After climbing to a record high of $900.40 on Jan. 25, Tesla lost more than a third of its value by March 8.

A person is pointing to a digital stock chart that rises, then falls, and then rises again.

Tesla's stock rallied on Tuesday. Image source: Getty Images.

Some forward-thinking investors, however, believe the sell-off was overdone. For one, Ark Investment Management founder and CEO Cathie Wood, who oversees the popular ARK Innovation ETF (ARKK -1.44%), has used the downturn to scoop up more Tesla shares at a significant discount to their recent highs. 

Now what 

New Street analyst Pierre Ferragu also thinks now is a good time to buy Tesla's shares. He raised his rating on Tesla's stock from neutral to buy on Tuesday. Ferragu sees Tesla's stock price climbing to $900 as it ramps up its manufacturing capacity and quadruples deliveries of its popular electric vehicles over the next three years. 

Wedbush analyst Daniel Ives, meanwhile, said today that he believes Tesla's stock price could reach as high as $950. Ives highlighted the EV leader's strong sales in China, which rose 18% sequentially in February to 18,318 vehicles. His price target represents potential gains to investors of roughly 50% from Tesla's current share price near $630.  

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$663.90 (-6.42%) $-45.52
ARK ETF Trust - ARK Innovation ETF Stock Quote
ARK ETF Trust - ARK Innovation ETF
ARKK
$42.41 (-1.44%) $0.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.