Investor's Corner
How Tesla (TSLA) took advantage of the retail investing boom
Tesla (NASDAQ: TSLA) stock has split 5:1. With its increased volume of shares, the price has adjusted accordingly, making its stock more available to retail investors who have become more prevalent and populous during 2020.
TSLA stock officially adjusted in price on Monday, August 31, 2020, and are now available for $442.68 per share. The adjustment in price came after the stock performed a 5:1 split, which was approved by Tesla’s Board of Directors on August 11.
As the COVID-19 pandemic surged through the world and changed life as it was once known, entertainment simply halted. Sports and shows stopped to prevent the spread of the virus, businesses closed and stocks fell. However, while the world was adjusting, it was the opportunity of a lifetime for young, retail investors to get their first taste of Wall Street as company valuations dropped due to closures and decreased demand.
While some businesses wilted in the wake of the pandemic, other entities grew. One of these entities was online brokerage firms, like Robinhood, Charles Schwab, and TD Ameritrade, who all reported increases in accounts through the first quarter of 2020.
Some of these companies experienced a growth of 170% in new accounts, proving that investing on your Smartphone is simple and accessible. Schwab, TD Ameritrade, and E-Trade all reported massive increases in account ownership in Q1 2020 compared to the same time period a year prior. Schwab saw a 59% year-over-year increase in accounts, while TD Ameritrade and E-Trade saw a 149% and 169% increase, respectively.
Why are more accounts being created on these platforms? It comes down to availability, JJ Kinahan of TD Ameritrade said.
“Perhaps because they’re home or perhaps because of furloughs, they also have time to dedicate to their investments that they didn’t necessarily have before,” Kinahan said to CNBC.
However, no-fee trading and accessibility through a Smartphone have also driven a younger demographic to get involved in the market.
“I think a lot of the innovation around trading commissions has really driven the accessibility of the markets for everyone and clearly that cohort, the younger ones, are seeing it for the first time in the headlines every day,” Tim Welsh of Nexus Strategy said to CNBC.
In terms of trading volume from retail investors, it has doubled in 2020 compared to last year as now 20% of daily stock market activity comes from individuals, according to Citadel Securities.
Whether Tesla realized that retail investors were getting involved in trading because of the pandemic is unknown. However, the company did realize that its surge in price per share in 2020 was not favorable for younger individuals or retail investors as a whole, so it performed the split.
CEO Elon Musk considered a split on June 30, when @TeslaGong had mentioned that a stock split would help more fans of the company own shares. While Musk said it was “worth discussing at annual shareholder’s meeting,” the company completed a split more than three weeks before that event will take place on September 22.
Worth discussing at annual shareholders meeting
— Elon Musk (@elonmusk) July 1, 2020
However, allowing fans, employees, and individual investors contributes to Tesla’s mission as a company. Past selling cars or putting solar panels on houses, the goal is to accelerate the world’s transition to sustainable energy. By increasing the number of people who own the company’s stock, Tesla effectively increases the number of supporters it has in making the goal become a reality. With the widespread availability of TSLA shares, more people will contribute to the fight against climate change.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
Tesla stock (NASDAQ: TSLA) just got a price target boost from its biggest bear, Gordon Johnson of GLJ Research, who raised his expected trading level to one that is 95 percent lower than its current trading level.
Johnson pushed his Tesla price target from $19.05 to $25.28 on Wednesday, while maintaining the ‘Sell’ rating that has been present on the stock for a long time. GLJ has largely been recognized as the biggest skeptic of Elon Musk’s company, being particularly critical of the automotive side of things.
Tesla has routinely been called out by Johnson for negative delivery growth, what he calls “weakening demand,” and price cuts that have occurred in past years, all pointing to them as desperate measures to sell its cars.
Johnson has also said that Tesla is extremely overvalued and is too reliant on regulatory credits for profitability. Other analysts on the bullish side recognize Tesla as a company that is bigger than just its automotive side.
Many believe it is a leader in autonomous driving, like Dan Ives of Wedbush, who believes Tesla will have a widely successful 2026, especially if it can come through on its targets and schedules for Robotaxi and Cybercab.
Justifying the price target this week, Johnson said that the revised valuation is based on “reality rather than narrative.” Tesla has been noted by other analysts and financial experts as a stock that trades on narrative, something Johnson obviously disagrees with.
Dan Nathan, a notorious skeptic of the stock, turned bullish late last year, recognizing the company’s shares trade on “technicals and sentiment.” He said, “From a trading perspective, it looks very interesting.”
Tesla bear turns bullish for two reasons as stock continues boost
Johnson has remained very consistent with this sentiment regarding Tesla and his beliefs regarding its true valuation, and has never shied away from putting his true thoughts out there.
Tesla shares closed at $431.40 today, about 95 percent above where Johnson’s new price target lies.
Tesla (NASDAQ: TSLA) stock received a price target update from Pierre Ferragu of Wall Street firm New Street Research, citing the company’s growing lead in self-driving and autonomy.
On Tuesday, Ferragu bumped his price target from $520 to $600, stating that the consensus from the Consumer Electronics Show in Las Vegas was that Tesla’s lead in autonomy has been sustained, is growing, and sits at a multiple-year lead over its competitors.
CES 2026 validates Tesla’s FSD strategy, but there’s a big lag for rivals: analyst
“The signal from Vegas is loud and clear,” the analyst writes. “The industry isn’t catching up to Tesla; it is actively validating Tesla’s strategy…just with a 12-year lag.”
The note shows that the company’s prowess in vehicle autonomy is being solidified by lagging competitors that claim to have the best method. The only problem is that Tesla’s Vision-based approach, which it adopted back in 2022 with the Model 3 and Model Y initially, has been proven to be more effective than competitors’ approach, which utilizes other technology, such as LiDAR and sensors.
Currently, Tesla shares are sitting at around $433, as the company’s stock price closed at $432.96 on Tuesday afternoon.
Ferragu’s consensus on Tesla shares echoes that of other Wall Street analysts who are bullish on the company’s stock and position within the AI, autonomy, and robotics sector.
Dan Ives of Wedbush wrote in a note in mid-December that he anticipates Tesla having a massive 2026, and could reach a $3 trillion valuation this year, especially with the “AI chapter” taking hold of the narrative at the company.
Ives also said that the big step in the right direction for Tesla will be initiating production of the Cybercab, as well as expanding on the Robotaxi program through the next 12 months:
“…as full-scale volume production begins with the autonomous and robotics roadmap…The company has started to test the all-important Cybercab in Austin over the past few weeks, which is an incremental step towards launching in 2026 with important volume production of Cybercabs starting in April/May, which remains the golden goose in unlocking TSLA’s AI valuation.”
Tesla analyst breaks down delivery report: ‘A step in the right direction’
Tesla has transitioned from an automaker to a full-fledged AI company, and its Robotaxi and Cybercab programs, fueled by the Full Self-Driving suite, are leading the charge moving forward. In 2026, there are major goals the company has outlined. The first is removing Safety Drivers from vehicles in Austin, Texas, one of the areas where it operates a ride-hailing service within the U.S.
Ultimately, Tesla will aim to launch a Level 5 autonomy suite to the public in the coming years.
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