Tesla Stock Favors Bulls After Elon Musk Robotaxi, Optimus Projections
This will be the year investors start seeing Tesla primarily as a robotics company and that could mean big things for company shares.
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There was a time when Amazon AMZN was primarily an online book seller. There was also a time when Apple AAPL was thought of as a laptop/desktop computer company.
Those perceptions gradually changed. Today, Amazon is the world's largest online retailer. Apple is known for a variety of consumer electronics, most notably the iPhone.
We are about to see a similar change in the way investors perceive Tesla TSLA.
Tesla’s fourth quarter earnings report was unspectacular. The Texas-based EV manufacturer missed both earnings and revenue projections by about 5%.
Auto revenues dropped by 8% from the year-ago quarter, as international competitors chipped away at Tesla’s market share in the EV sector. The resulting decline in auto revenues was somewhat offset by growth in services, energy and storage.
Based on Wednesday’s post-earnings conference call, 2025 will be the year investors stop thinking of Tesla as an auto company, and instead consider it a robotics company.
CEO Elon Musk called 2025 a "pivotal year" on the call, indicating that robotaxis would begin operating autonomously in June near the company’s Austin, Texas headquarters.
Musk also indicated that more of Tesla’s Optimus robots would be deployed in the company’s factories by the end of this year, focusing on menial tasks. Musk suggested that revenues from Optimus could eventually reach $10 trillion.
Musk’s optimism helped buoy the stock on Thursday, as Tesla shares gained about 3% on a relatively quiet day. While I’d never bet against Musk, Tesla’s chart indicates that it may take time for his bullish scenarios to be reflected in the stock’s price.
Because Tesla's stock performance has been nothing short of spectacular, a technical pause is necessary to digest the stock’s gains. Tesla shares have gained over 80% during the last six months, and over 110% during the past 12 months.
When stocks achieve such huge gains, they often go through a period of consolidation. That’s what’s happening on Tesla’s chart right now (black dotted lines).
Tesla’s chart currently shows conflicting patterns of lower highs (LH) and higher lows (HL). This consolidation pattern indicates that neither bulls nor bears have the upper hand in the short term.
However, the stock’s long-term trend definitely favors the bulls. Despite a decline of about 15% since the stock reached its all-time high on December 17 (H), Tesla is still trading above its 50-day moving average (blue) and its 200-day moving average (red).
Another positive sign is the stock’s recent decline in volume (green line). As the stock came off its December highs, Tesla’s volume began to fade, an indication that institutional investors aren’t in a hurry to offload shares.
Why would institutional investors hold on to Tesla, despite this week's soft earnings report? Perhaps they’re looking beyond Tesla’s disappointing auto sales, and looking toward a future powered by robotics.
At the time of publication, Ponsi was long TSLA.
