Last week Tesla had a pretty impressive earnings report. On Wednesday, January 29, the company reported revenue and an EPS that both beat expectations. And to be fair, the earnings per share beat was particularly impressive, coming in at $2.14 compared to a consensus EPS estimate of $1.72.
It was no surprise, then, that the day Tesla’s earnings were reported the stock shot up 12% in after-hours trading. The next day, the stock made similar gains that carried over relatively flatly to Friday. No wonder Elon Musk dropped an EDM track to celebrate.
But then came yesterday, Monday, February 3, and Tesla shares skyrocketed almost 20% in a single day–ending the day at above $780 for a single share. And now today? At the time of this writing, Tesla shares are up another 20%, with the stock now worth more than $937 per share. That’s a $157 jump in one day.
But no one knows why.
Usually, a good quarter wouldn’t have extended to such extraordinary stock gains four trading days on from the results. And as Barron’s points out, from a fundamentals perspective, the only materially significant news about Tesla this week came on Monday when Tesla battery partner Panasonic said utilization was improving, which is a sign that battery costs are falling. Falling battery prices means lower costs, and thus higher margins, for Tesla.
But a 20% stock jump on that news alone on Monday? And another 20% stock jump today (at the time of this writing) based on that news? It’s unlikely that is the sole catalyst.
But what else could it be? MarketWatch points out that yesterday a small investment firm called ARK Invest went very bullish on the company, saying Tesla shares could be worth $7,000 each by 2024. Of course, ARK is a relatively small firm, meaning its prediction doesn’t carry the weight it would had it come from larger firms.
So why is Tesla skyrocketing today still? The simple fact is no one really knows. But right now, Tesla investors are enjoying the ride.