Tesla’s Ascendancy Tagged as a "Meme Stock" by Veteran Investor
Tesla’s Meteoric Rise and Meme Stock Label
In a surprising turn of events, Tesla’s impressive stock performance has earned it the title of "meme stock" from seasoned investor and fund manager Bill Gross. Over the last ten days, Tesla shares have experienced a remarkable rally, seeing a 25 percent increase, and a whopping 50 percent surge over the past 30 trading sessions.
Understanding the Meme Stock Phenomenon
The term "meme stock" refers to a security that rapidly gains popularity through social media platforms. This concept is relatively new, but the most notable example is Gamestop ($GME). Gamestop’s saga over the last three years has been marked by a dramatic short-squeeze that turned the tides against large hedge funds, driven by fervent retail investors and influential online personalities like RoaringKitty.
Contrasting Gamestop and Tesla
While Gamestop and Tesla have both been dubbed meme stocks, they are fundamentally very different entities. Gamestop has struggled to adapt in an era where digital game purchases and online direct buys of gaming consoles are the norm. Hedge funds saw it as a prime shorting candidate until retail investors pushed back hard.
Tesla, conversely, is an industry leader in electric vehicles and sustainable energy solutions. Despite facing many highs and lows, particularly since the COVID-19 pandemic, Tesla has shown a strong recovery, bouncing back from a steep decline at the start of 2024. So far this year, the company’s shares have risen by over 5 percent.
Key Drivers Behind Tesla’s Stock Surge
Several factors are fueling Tesla’s recent surge:
- Q2 Delivery Beat: Tesla exceeded Wall Street’s delivery expectations for the second quarter.
- Record Energy Deployment: The company recorded its strongest quarter in terms of energy deployment.
- Upcoming Catalysts: Investors are eagerly anticipating the August 8 Robotaxi Unveiling Event, which is expected to be a significant milestone for the company.
Bill Gross’s Perspective
Despite these positive developments, Bill Gross cautions that Tesla’s meteoric rise exhibits characteristics typical of meme stocks. In a post on X, Gross remarked:
"Tesla is acting like a meme stock — sagging fundamentals, straight-up price action. But then there seems to be a new meme stock every other day now. Most are pump and dump. Chewy, Zapp, and the old favorite, Gamestop."
Gross’s remarks underline the volatile and sometimes speculative nature of Tesla’s recent stock performance.
Closing Thoughts
Tesla is on the brink of achieving its eleventh consecutive day of stock gains, although it has slightly dipped by 0.25 percent in early trading this morning. Whether Tesla’s current trajectory is sustainable or a flash in the pan remains to be seen, but for now, it continues to draw both admiration and skepticism from the investing community.
For more insights and updates, feel free to reach out to me at Joey@teslarati.com, or on Twitter @KlenderJoey. If you have any news tips, please email us at tips@teslarati.com.
Tesla’s surge and meme stock label highlight the stock market’s volatile and unpredictable nature, where social media influence can significantly shape market trends.
5 Comments
tesla just can’t be compared to gamestop. they’re world’s apart in terms of business model and future potential. calling tesla a meme stock is just ridiculous!
These so-called experts always have something to say. Tesla is doing great, and all they can do is compare it to meme stocks. Just enjoy the ride, people!
Interesting take on Tesla’s rise. It’s true that social media plays a role, but Tesla’s achievements in EV and energy can’t be ignored. It’s not just a meme stock; it’s a market leader.
Oh great, now every successful stock is a meme stock? What’s next, Apple is a meme stock too? This is getting out of hand 😂
Ah yes, another day, another ‘expert’ with a hot take. Tesla surge because of meme status? Sure, and my dog is the next Warren Buffett. Give me a break!