Tesla adds $100bn in value as tech stocks stage bounce-back
Elon Musk’s electric car maker climbed by as much as 20% as it clawed back some of the steep declines seen over recent weeks.
Tesla has led a bounce-back for US tech stocks as its shares surged by as much as 20% partly thanks to figures showing higher sales in China.
The electric car company, led by Elon Musk, was also boosted by an analyst upgrade and a wider upturn in investor sentiment which saw the tech-heavy Nasdaq index climb nearly 4%.
On Tuesday it was the stand-out performer among a host of tech stocks as they staged a recovery after sharp losses in recent weeks.
Apple, Amazon and Microsoft were all among those making gains.
They are among “stay at home” stocks that have been big winners during the pandemic but more recently have come off those highs.
That is partly because investors are now pricing in faster economic growth, higher inflation – and higher interest rates.
Those higher rates make it relatively less attractive to park cash in tech companies – investments which are often bets that those companies will turn profitable years into the future.
The shift in sentiment pushed the Nasdaq into so-called “correction” territory at the start of this week, meaning it was more than 10% below its peak closing level, seen on 12 February.
On Tuesday, the index bounced back as markets continued to readjust.
Tesla has been at the heart of market volatility in recent months, last year soaring to become the world’s most valuable car maker despite producing a fraction of the volume of vehicles made by more conventional rivals.
Its jump on Tuesday – adding more than $100bn to its market capitalisation – came after an increase in sales of its Chinese-made vehicles from 15,484 in January to 18,318 in February.
Tesla was also boosted by one analyst raising his rating of the stock to “buy” from “neutral”.
The shares are still more than 20% lower than their January record high but are up by 70% over the past six months.