Tesla stock is on a spectacular ride, short squeeze is unlikely

Tesla stock price is among the best performers in the tech-heavy Nasdaq index as investors applauded the decision of adding a stock of the largest electric vehicle company to a broader market S&P 500 index.

In addition, the company’s strategy of broadening its revenue base has significantly been contributing to bullish sentiments.

TSLA Tesla, Inc. daily Stock Chart

Tesla stock soared close to 20% last week, marking the best weekly performance in the last three months. The shares of the largest electric vehicle company are currently trading around an all-time high of $500, but analysts say the bull-run is unlikely to end soon.

Analysts expect more upside for Tesla stock

Although shares of Tesla grew close to 600% in the last twelve months, the majority of analysts appear bullish over the future fundamentals.

For instance, Morgan Stanley analyst Adam Jonas has raised interesting facts about Tesla. The firm has provided a $550 price target to Tesla stock.

“Tesla is on the verge of a profound model shift from selling cars to generating high margin, recurring software, and services revenue,” Adam Jonas said.

“Tesla has continued to develop its services/platform business to a level where we feel that it is appropriate for investors to consider to change how they model the company’s revenue and profit streams. The internet-of-cars opportunity is real and, in our opinion, is a prerequisite to unlock further upside to the stock,” he added.

Meanwhile, the analyst Bill Maurer claims the short squeeze is unlikely as short interest is below 50 million shares.

Financial Numbers are backing gains

The company has aggressively been working on revenue and profit expansion strategies. Its move towards software, energy, insurance, and third party supplier business would add significantly to revenue growth in the days ahead. It has also impressed investors with its profitability.

The company has generated profits in the past five consecutive quarters.

Siraj Sarwar - Lead Analyst
@tradethedayfx
Siraj Sarwar has been performing analysis on the stock market, equity research and general business consultation. He regularly contributes articles on economics, commodities, and equities to the world's leading websites, including Trade the Day, SeekingAlpha, TheStreet, and MSN.
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