Al Root

Tesla stock was rising in early trading on Thursday after falling almost 6% Monday through Wednesday. Declines that put shares at risk of dropping for a ninth consecutive week.

Shares have been beaten down by falling Wall Street sales estimates driven by fears that Elon Musk's political activities hurt his car company's brand. Things got so bad that President Donald Trump bought a Tesla. The stock hasn't benefited significantly from the sales stunt, but the Trump bump might be a real thing.

Tesla stock was up 1.8% at $240.17 in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were 0.5% and 0.3%, respectively.

As for the bump, Future Fund Active ETF co-founder and Tesla shareholder Gary Black noticed that Tesla's "observed daily sales" bounced on Mar. 12, the day after Trump and Musk hosted an impromptu commercial at the White House.

"Observed daily sales" is a metric provided by Bloomberg. It's based on tracking credit card transactions. The metric isn't perfect for predicting sales, but it's an interesting tidbit from the financial data provider.

Credit card transactions would probably be a proxy for orders. Beyond Mar. 12, transactions tracked by Bloomberg have been up year after year.

That's one positive investors can hold on to. The data "throws cold water on the thesis that the Tesla brand has been damaged by Musk's political rhetoric," said Black.

He believes the introduction of the updated Model Y is an important factor in early-year sales weakness. Tesla is ramping up production of the newest version of the Y. It updated the Model 3 in 2024 and sales of that model dipped and then recovered during the rollout.

It will take some hard data to convince investors that the worst is past -- such as improving regional sales numbers, which are typically released by automotive data providers. (February sales data for Europe will be released next week.)

"Trump buying a Tesla with an event at the White House last week is great political theater...but it does not resolve the current brand/demand problem for Musk," wrote Wedbush analyst Dan Ives in a Wednesday report.

Whatever happens to sales, Ives would like to see Musk formally announce how he will split his time between Tesla and DOGE and update investors about the lower-priced model and robotaxi service.

A new model and self-driving cabs would also calm investors' nerves.

Coming into Thursday trading, Tesla stock was down 42% so far this year. Shares rose 4.7% on Wednesday after Cantor Fitzgerald analyst Andres Sheppard upgraded shares to Buy from Hold, keeping his $425 price target for the stock. Shares had fallen far enough to make them attractive, and he believes new products can improve investor sentiment.

Tesla is slated to start selling its highest-level driver assistance software in Europe and China this year. It's slated to start selling a lower-priced model this year and launch a self-driving taxi service.

Write to Al Root at allen.root@dowjones.com

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March 20, 2025 04:33 ET (08:33 GMT)

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