Why Tesla Stock Is Up By 7% Today

Key Insights

• Sanctions on Russia provide support to EV stocks.
• The rebound is led by Tesla, other EV companies follow.
• Tesla stock will likely remain sensitive to geopolitical news in the upcoming trading sessions.

Tesla Stock Rallies As West Cuts Ties With Energy-Rich Russia

Shares of Tesla gained upside momentum as traders bet that harsh sanctions on Russia will push the world towards clean energy – and electric vehicle stocks.

Other stocks in the EV segment, like NIO and Rivian, also enjoy healthy gains today. NIO is up by 10%, while Rivian is gaining 7% during today’s trading session.

It looks that markets have underestimated the potential severity of sanctions on Russia. Howeer, the Western countries are ready to minimize ties with Russia, including ties in the energy space, which may serve as a bullish catalyst for the electric vehicle segment in the long term.

What’s Next For Tesla Stock?

Analyst estimates for Tesla earnings keep moving higher. Currently, the company is expected to report earnings of $10.48 per share in 2022, so Tesla stock is trading at 83 forward P/E.

The company’s shares have been under pressure as traders moved away from riskier assets, but the recent developments could provide long-term tailwinds for EV companies.

It should be noted that the leading tech stocks have mostly received support during the recent days of the escalating crisis, as traders viewed them as safe-haven assets. This factor may provide additional support to Tesla stock, in case the market continues to move lower.

I’d also note that Tesla stock is down by roughly 30% from its highs that were reached back in November 2021, so the market may see the recent pullback as a good opportunity to buy the shares of the leading EV company.

In the near term, the dynamics of Tesla stock will greatly depend on the general market sentiment and the developments of the current crisis around Ukraine. Additional sanctions on Russia in the energy space may serve as a bullish catalyst for Tesla stock.

For a look at all of today’s economic events, check out our economic calendar.