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Tesla (TSLA -0. 57%) is one of the most volatile mega-cap tech stocks. While owning Tesla has been (for the most part) an excellent long-term decision, timing has been critical.
The company has a lot of exciting projects involving its electric vehicles and artificial intelligence (AI), but I’m remaining cautious as an investor for the time being. Below, I’m going to break down why Jan. 20 could be a particularly important date for Tesla investors and whether the stock is a buy before then.
Let’s break down Tesla’s inventory in 2024.
Between Jan. 1 and Nov. 4, 2024, Tesla stock was down 2.3% and trailing the S&P 500 by a wide margin. However, shares were actually down as much as 42.8% at one point during this period.
Following Donald Trump’s victory in the United States presidential election on November 5, Tesla shares have discovered new life. Between Nov. 41 and Dec. 41, the stock gained 66. 3% and the company regained its position in the trillion-dollar club.
Tesla CEO Elon Musk has become one of Trump’s biggest supporters in the final months of the election campaign. Investors have begun to view the Trump-Musk alliance as a bullish indicator for Tesla.
While this may sound fantastic for Musk and the company, take a look at the stock’s functionality towards the end of the year and see that Tesla started selling off. Since Christmas Eve, the stock is down 14. 3% at the time of writing.
Selling shares at the end of the year is common, especially for corporations that have generated record profits in short periods of time. In addition, Tesla recently released delivery and production figures for its EV business for the fourth quarter, and they show that they have failed to meet Wall Street’s expectations.
Although Tesla stock appears to be stuck in a downward trend, I wouldn’t be surprised to see shares rebound as Jan. 20 inches closer. Let’s dig into why.
On Jan. 20, President-elect Donald Trump will be sworn into office. Given Musk’s ties to the soon-to-be president, I would not be shocked in the slightest if Tesla stock starts to see an uptick.
Here’s the reality: While the relationship between Musk and Trump arguably bodes well for Tesla, especially when it comes to a regulatory environment that’s more favorable to the company’s self-driving ambitions, any progress made before or after the inauguration is due to a narrative, not a narrative. Tesla’s fundamentals.
Since the election, Tesla has behaved like a meme stock. Nothing was replaced at the company on November 5th. Nothing will replace it on January 20th either. Investors don’t know how the company’s autonomous driving efforts will evolve or what regulatory changes new management will make. will do in this area.
So if you’re considering making an investment in Tesla’s inventory right now, you want to do so in the company’s long-term vision for artificial intelligence, self-driving cars, and robotics. If so, it matters a lot less when you’re picking inventory.
Otherwise, investing in momentum stocks like Tesla is a threat. If you have a low tolerance for threats, you may need to avoid them.
Adam Spatacco holds positions at Tesla. The Motley Fool ranks and recommends Tesla. The Motley Fool has a disclosure policy.
Market insights driven through Xignite and Polygon. io.