According to one expert, Tesla’s largest stock run since 2020 could soon come to a halt as investors realize the enormous magnitude of competition it will face in the electric vehicle industry.
Craig Irwin of Roth Capital Partners expressed doubt Thursday that the Elon Musk-led tech behemoth will sustain its current share price in the long run, while established automakers like Ford and GM ramp up their EV output.
Tesla’s stock has risen 109% in 2023, putting it on course for the greatest six-month increase since 2020. The stock has benefited from both an AI-fueled advance in other Big Tech stocks and investors’ assumption that CEO Musk has refocused on building the EV company since hiring Linda Yaccarino to head Twitter.
However, Goldman Sachs, Morgan Stanley, and Barclays have all advised investors to take profits from the recent rally, downgrading the stock from “buy” to “hold.”
“When I look at Tesla, I think it’s grossly overpriced,” Irwin remarked.
According to the analyst, even the AI trade, which has helped mega-cap tech companies launch a major surge in 2023, is unlikely to keep Tesla’s stock price at its present level, because the EV maker’s much-touted self-driving technology is still years away from genuinely boosting its earnings.