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I'm pretty sure last Thursday's (October 24) nearly 22% increase in tesla (NASDAQ:TSLA) pushed at least some UK holders into ISA millionaire status, at least on paper.
Unfortunately, I was not one of them. But it made me wonder if buying a piece of the electric car maker now would increase my chances of breaking into that select group at some point.
Come back in a big way!
After suffering a nasty drop in profits in the second quarter, Tesla bounced back and regained its form in the third quarter. Earnings per share reached 72 cents, beating expectations. Vehicle deliveries also rose 4% to nearly 463,000, eclipsing the previous three-month period.
It wasn't a complete success for the Texas-based titan. Revenue reached $25.18 billion, slightly less than analysts expected.
But let's not beat around the bush. As updates continue, I doubt many investors will be knocking on publicity-shy Elon Musk's door and demanding he get to work.
In fact, the market took advantage of this news and the share price followed suit.
More to come?
As extreme as that daily movement was, it's important to put it in perspective.
Tesla stock is still up only about 5% in 2024 as I write. It is also well below the record (just over $400) recorded almost three years ago. Whether you can quickly add another 60% or so from here to challenge that last number is open to debate. But if the company can surpass its total deliveries of 1.8 million cars by 2023 and successfully bring new vehicles to market (for example, the Model Y Juniper) in 2025, I think it's possible.
Trouble ahead
The sticking point for me is the potential volatility along the way. It's easy to forget that the same stock that plummeted in early October following the poorly received launch of the company's robotaxi.
There are plenty of other things to reflect on, too, including the US election.
We are a politically neutral group at Fool UK. However, this doesn't mean you can't speculate on whether Musk's endorsement of Donald Trump could affect Democratic voters' motivation to buy his cars in the future. On the other hand, it's easy to see why the latter's plan to increase tariffs on Chinese electric vehicles entering the US would suit Tesla.
Elsewhere, the S&P 500 is up more than 20% since January and almost 40% in 12 months. This makes some sense considering that inflation has finally calmed down and rate cuts have begun. But even the most optimistic investor must ask whether it's necessary to pause for breath.
This is what I'm doing
I'm not going to deny that Tesla stock could continue to create millionaires for ISA, as it has outperformed its industry rivals by six so far.
But I also think there's a good chance of reaching that seven-figure goal by investing as much as possible in a variety of quality stocks and funds on a consistent basis and holding them for the long term.
As strategies go, this isn't as sexy or fast-paced. I don't think the investment should be.
For now, I keep my exposure to Tesla in a few funds that fit my risk profile and allow me to sleep at night.
I still prefer to watch stock price antics with a bag of popcorn in hand.
