Shares of the Palo Alto, California-based company climbed by as much as 6.95% Monday, briefly reclaiming the $700 level for the first time in two weeks. The early advance gave Tesla a $680 billion market capitalization, up $45 billion from last week’s closing level.
The delivery numbers were a “paradigm changer” that show global pent-up demand for the Model 3 and Model Y vehicles is hitting the “next stage of growth as part of a global green tidal wave,” wrote Dan Ives, a New York-based analyst at Wedbush Securities.
Ives expects the current 200,000 unit electric-vehicle tax credit ceiling to be removed and potentially replaced with a $10,000 tax credit, as part of President Biden’s $2.3 trillion infrastructure plan. Tesla has already sold the allotted 200,000 units that were eligible for a $7,500 EV tax credit, putting it at a “price disadvantage” versus its competitors, he said.
As a result, Ives upgraded Tesla shares to “outperform” and raised his price target to $1,000, up from $950. He also said the stock could reach $1,300 over the long run.
The strong results also caused investment firms Cowen and JPMorgan Chase & Co. to hike their price targets to $573 and $155, respectively.
Tesla on Friday reported 184,400 vehicles were delivered in the three months through March, exceeding the 177,822 vehicles that analysts surveyed by Refinitiv were expecting. Tesla produced a total of 180,338 vehicles during the period.
The company noted strong demand from China, but did not break out numbers for the country.
“Great work by Tesla team!” CEO Elon Musk tweeted Monday. “Special mention of Tesla China.”
Tesla shares were down 6.22% this year through last week compared with a 7.02% gain for the S&P 500.