Tesla Stock Surges 19% Following Strong Earnings Report

Tesla shares skyrocketed by 19% on Thursday, marking the stock’s biggest single-day gain since 2011, driven by the company’s stronger-than-expected earnings for the third quarter. The surge comes after Tesla reported revenue of $25.18 billion, just below analysts’ expectations of $25.37 billion, but still reflecting an 8% increase year-over-year. The company posted adjusted earnings per share of 72 cents, exceeding the average forecast of 58 cents.

JPMorgan analysts stated that this earnings beat surprised many investors who had become accustomed to Tesla missing expectations, predicting a strong positive reaction in the stock market.

A significant boost to Tesla’s profit margins came from $739 million in revenue for environmental regulatory credits, though JPMorgan analysts cautioned that this may not be a sustainable driver of earnings in the long term.

Tesla CEO Elon Musk, during an earnings call, forecasted vehicle growth between 20% and 30% for next year, attributing this to lower-cost models and advancements in vehicle autonomy. This optimistic outlook contrasts with analyst estimates, with Morgan Stanley projecting a more conservative 14% growth, dependent on Tesla’s ability to offer more affordable options and improved financing.

Thursday’s stock rally erased Tesla’s losses for 2024, leaving the stock up 3% for the year, though it still lags behind the Nasdaq’s 22% rise.