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It was a rough ride Tesla (NASDAQ: TSLA) owners from 2024 to now. But things have been going well lately. The stock price is 24% higher than where it stood one month ago. I S&P 500 managed less than 4%.
Once again, we have an example of how stock picking has the potential to grow my wealth significantly at a faster clip than tracking an index. But how likely is this to continue?
Well, no one knows for sure which stock will be next, especially one that is as disruptive as this one. But I think there are at least a few reasons for optimism.
October can be special
One of the reasons to be bullish on Tesla stock in the near term is the upcoming unveiling of the company's robotaxi (or Cybercab). This has been postponed to 10 October. There are rumors that it will be launched at the Paris Motor Show in a few days.
In addition to this, we can get new news about updates of existing cars like the Model Y. This may make drivers salivate considering that the current version was the best-selling car in the world in 2023.
Another development is the company's plans to launch Full Self-Driving software in Europe and China by 2025. This assumes that it receives approval from the regulators. That could cost the Austin-based business overseas revenue.
All of this helps explain why stocks did so well in September.
Things I'm afraid of
Naturally, there is no shortage of risks when it comes to Tesla. Chief among these, in my opinion, is also the company's greatest asset.
Like many people, I admire Elon Musk for his vision. But I'm also as concerned as ever about his willingness to engage (online) with the remains of, well, anyone. Personally, I like business leaders to stick to their weave and not waste their talent and time on writing social media posts. Of course, one might argue that Tesla's stock price hasn't been able to deliver the kind of return it managed this past month. outside someone like Mr. Musk.
In general, there are many factors that can affect production and sales. These range from unacceptable increases in inflation to unexpected problems with those regulators mentioned above.
This would be fine by me if the stock was trading at the sort of P/E ratio we are used to in the UK markets. But Tesla is not and never has been. And Musk has missed many deadlines before.
More exciting than Tesla?
I'm not a big fan of directly holding growth stocks when sentiment rather than fundamentals seem to have a greater influence on their value. So, at the risk of sounding like a stuck record, that's why I'm always happy to get exposure to Tesla through. FTSE 100– it's on the list Scottish Mortgage Investment Trust. Having this also gives me access to another company owned by Elon Musk: SpaceX.
Now, if the latter were to give any indication of going public, the impact on the trust's share price could be eye-popping. That's why I've been adding to my Stocks and Shares ISA on and off over the last year or so. The intention is to continue doing so once the money is available.
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