"has shown that the stock has the ability to defy gravity, even though the underlying business may not be humming like it used to. Shareholders refuse to budge and are willing to back up the truck as long as Elon Musk has promises to make. It has so far proved all the bears wrong and has climbed well above its 2021 peak. Sales growth has slowed down considerably, and profits are in reverse."
"Things are moving in the right direction for Tesla, even though it is not as fast as bulls would like. Interest rates are coming down, and this is one variable that will greatly impact the demand for electric vehicles. Lower interest rates make it much cheaper to finance a car, thereby translating into significantly higher demand for Teslas. The company's best years were when interest rates were at their lowest."
Tesla stock has repeatedly risen despite weakening underlying business metrics, with shareholders continuing to buy as long as Elon Musk offers future promises. Sales growth has slowed and profits have declined, yet the stock has rallied for nearly two years and surpassed its 2021 peak. The 2026 outcome is binary: continued outperformance or a long, overdue correction. Broader market conditions will be the dominant influence. Lower interest rates would materially increase vehicle affordability and boost demand, but a return to near-zero rates is unlikely. Diminishing renewable enthusiasm, reduced EV tax credits, and consumer avoidance of Tesla present significant headwinds.
Read at 24/7 Wall St.
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