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If Tesla (TSLA) may be a tech company when car sales falter, it certainly may be a car company when sales exceed expectations. That’s how Wall Street sees it, as Tesla bulls are on the rise again.
Tesla shares have been rising over the past week more than 25%, driven by vehicle deliveries which beat estimates, leaving the paltry gains of the rest of the “Magnificent Seven” behind.
When CEO Elon Musk insisted earlier this year that Tesla is not a car companyThe message jolted the stock price even as sales faltered. While convenient, the speech was true enough. And the decree apparently works both ways.
O stock increase talks about the power of promoting an industry-leading product—a lesson for AI startups—and the benefit of making AI ambitions part of a broader business plan, rather than the sole aspect of it. But conversely, it underscores that Tesla’s heady AI goals are still closely tied to its car sales.
Combining big technology ambitions with driving cars off dealerships has been key to Musk’s salesmanship.
Upbeat new vehicle delivery data contrasts with a wave of negative sentiment.
Weighed down by fierce competition in China, weak demand at home, price cuts, layoffs and Musk’s legal and corporate dramas, Tesla has been limping along like a laggard in the Magnificent Seven. But recent wins have a way of erasing earlier losses. And Tesla is now on a winning streak, with an earnings report and a much-hyped robotaxi unveiling just around the corner.
In some ways, Tesla’s flexible identity as a car company when times are good and a technology company when times are bad can be an obstacle to a clear corporate strategy. Is Tesla still aiming for a mass-market EV in every family’s garage? Or is it a platform orchestrating a fleet of self-driving taxis pushing the frontier of AI technology?
It can be both, of course. And Musk is prone to wanting everything. Investors don’t seem to care what metaphorical hat a company is wearing on any given day. As long as the numbers are going up. AI can make that happen. And for now, so can cars.