Tesla watching its stock rise yesterday

Tesla shares are like Alex Honnold during Free Solo – on a climb. After reporting Q3 earnings after the bell on Wednesday, the company’s stock experienced its best single-day performance since 2013 on Thursday, increasing ~22%.

Some earnings highlights:

• Revenue came in slightly below expectations ($25.2 billion vs. $25.4 billion) but still increased 8% year over year.
• Profit was much better than expected ($0.72/share, adjusted vs. $0.58/share expected), boosted by $739 million in automotive regulatory credit sales.
• Tesla sold 16,000+ Cybertrucks in the US in Q3.

CEO Elon Musk also painted a Bob Ross-esque rosy picture of the future. He said on the earnings call that “vehicle growth” could reach 20%–30% next year, and that Tesla would eventually be producing 2 million Cybercabs/year.

But… The company will need to increase spending for its transition into an AI company next phase of growth, which includes rolling out a $30,000 self-driving Cybercab, AI-powered robots, and more-affordable vehicles.

And funding these capital-intensive projects – in addition to other regulatory and operating hurdles – could pose a challenge. Per the Wall Street Journal: Musk expects the cash for these new ventures to come in part from Tesla’s automaking operations, a historically low-margin business that’s highly competitive and sensitive to economic swings.

📈 Investors are still bullish: Thursday’s jump puts Tesla’s stock price at ~83 times forward earnings – more than twice what tech giants like Apple, Microsoft, and Amazon fetch.