In 2023, Tesla Inc. TSLA has emerged as the top pick for individual investors, surpassing even the SPDR S&P 500 ETF Trust SPY, as per Vanda Research data. This development coincides with Tesla’s remarkable turnaround in 2023, following a 65% slump in 2022.
What Happened: Investor Marko Sustic, associated with the European automobile industry, has almost doubled his Tesla holdings this year, banking on the company's technological edge over rivals, as per a CNBC report on Tuesday.
“It’s just a matter of time when the stock will explode,” Sustic opined.
Prior to 2019, Tesla did not even feature in the top 20 equities bought by individual investors, as per Vanda’s data. However, the stock of the company, led by Elon Musk, has more than doubled in the wake of its 2023 recovery.
Christopher Schwarz, a finance professor at the University of California Irvine, attributes Tesla’s increasing allure among retail traders to its notable rebound in 2023. Schwarz suggests that Tesla’s increasing media coverage, coupled with Musk’s personality, is the primary reason behind this surge in interest.
"It's always in people's minds to trade when they're looking for something to trade," Schwarz said.
Jeremy Ford, a construction contractor and Tesla investor, views the company’s past volatile periods as chances to acquire shares at bargain prices. Ford is optimistic about Tesla’s future, especially given its forays into AI and robotics.
Notwithstanding Tesla’s strong performance, Craig Irwin, an analyst at Roth MKM, advises caution regarding potential future hurdles. However, he concedes that the strong brand affinity among retail investors could keep Tesla’s stock afloat.
Why It Matters: Tesla’s ascension to retail investor stardom aligns with its increasing prominence on WallStreetBets. The company’s stock has been trending among the top 10 on the popular subreddit, further reinforcing its appeal among retail traders.
Moreover, Wedbush analyst Dan Ives predicted that Tesla will debut a sub-$30,000 electric vehicle by the end of 2024. This development could significantly boost Tesla’s unit volume, potentially driving further investor interest.
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