The stock market is largely imaginary. Sure, a company’s valuation is loosely tied to its underlying finances, but there are plenty of other factors that influence a stock’s valuation — from classical to supply and demand for the stock itself to vague, unknowable exaggerated figures.
The latter factor, According to analysts, which is behind the recent rally in Tesla stock. Its share price has more than doubled in 2023, an increase that doesn’t match the company’s financial position. Instead, analysts believe these gains come from enthusiasm around the automaker’s AI efforts — enthusiasm they don’t seem to have put much of a financial stake in. yesredistribute how much confidence analysts place in this increase:
Goldman Sachs on Monday downgraded Tesla to an equivalent “hold,” along with Morgan Stanley and Barclays, which downgraded the stock last week. However, brokerages have raised their price targets to reflect the momentum in Tesla stock, which has gained 71% since the end of April and has more than doubled this year.
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Morgan Stanley and Barclays point out that Tesla’s earnings are still at risk of being negatively adjusted as it faces competition in China and may be forced to cut prices.
In April, Jefferies and Truist Securities downgraded Tesla after the company reported lower profit margins in its first-quarter results.
Machine learning has had a lot of time this year, from artistic filters on TikTok to the development of ChatGPT and synthetic AI. These analysts seem to think that Tesla’s cultural influence in this market, as measured by Twitter likes and followers, won’t translate into any real financial boost for the company. . They might not be wrong — there’s a big gap between tinkering with ChatGPT and implementing any kind of useful AI in cars.
