Stock Market

Tesla’s Triumphs and Trials: TSLA Stock Outlook for 2024

Tesla (NASDAQ:TSLA) stock ended 2023 on a high note. The EV market leader reported record vehicle deliveries for the year (1.808 million), representing a 38% increase compared to 2022. The stock ended the year up by triple-digits. That was fantastic news for those who bought in when sentiment was at its most bearish last winter.

For TSLA’s longtime skeptics, this is a horrendous turn of events. Contrary to bearish predictions, this high-flying stock remained unaffected by factors like inflation, interest rates, and competition. Despite challenges, Tesla may prove its skeptics wrong in the new year. However, whether that means you should buy and hang tight today is another question entirely.

TSLA Stock 2024 Outlook: Many Catalysts on Tap

Tesla stock remains far from its past all-time high. As you may recall, during the height of “EV stock mania” in 2021, TSLA reached prices north of $400 per share. In hindsight, one can argue that shares went up too far, too fast two years ago.

That said, thanks to several catalysts, TSLA stock could make a big leap back towards near its high-water mark. For one, if the much-awaited pivot on interest rates by the Federal Reserve ends up taking shape this year, this may have a tremendous impact on re-accelerating electric vehicle demand growth in the U.S.

Also, over in China, the world’s largest EV market, and home to Tesla’s largest production facility, government stimulus efforts could indirectly boost EV demand. Demand has been affected by China’s weak post-Covid recovery. A demand resurgence may help counter a key headwind for Tesla (rising local competition).

That’s not all. The hitting of new milestones with its autonomous driving technology is something else that would drive further gains for TSLA. So too, would any progress with Tesla’s efforts to bring a low-priced EV to market, as InvestorPlace’s Thomas Niel argued last month.

Volatility Around the Corner?

Several factors could make 2024 a strong year for TSLA stock. Proceed with caution. More share volatility could come soon. TSLA ended 2023 on a high note because of the market’s strong performance.

Stocks, especially growth stocks, rallied during November and December, thanks to optimism about the aforementioned possible “Fed pivot.”

However, doubts about when this pivot will happen (or even if it will happen at all this year) could be creeping back up. This could result in a rocky stock market, and another short-term move lower for TSLA.

Beyond negative price moves driven by the broad market’s movements/macro news, concerns about Tesla itself may also drive a sharp pullback for shares. For instance, as I discussed last week, negative news about the Cybertruck could dampen bullishness for TSLA.

When Tesla next releases earnings on Jan. 24, investors may look to certain aspects of the earnings report (such as further margin declines, or less-stellar full-year sales outlook) as excuses to bail on the stock. With all this in mind, in contrast to last year, TSLA’s price performance could experience a rough start.

Bottom Line: Wait for a Better Time to Buy

Tesla’s long-term prospects remain fairly bright. Morgan Stanley analysts suggest diversifying into self-driving technology licensing and high-margin products/services for potential earnings growth of 27% between now and 2030.

If this bull case pans out, shares still have considerable room to run. This suggests holding onto a TSLA position, if it’s currently in your portfolio. It also suggests eventually adding some to your portfolio if you don’t already own it, but bear in mind there’s no rush to do so.

In short, as much could knock it lower before it surges even higher, wait for weakness before initiating/adding to a TSLA stock position.

TSLA stock earns a B rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.