What's behind Tesla's record winning streak? Top analyst Adam Jonas has a theory - CNBC

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The key to Tesla 's biggest winning streak on record might lie in artificial intelligence, according to top auto analyst Adam Jonas. "Tesla stock can be streaky, but this most recent run sets its record for most consecutive days of stock price appreciation," Morgan Stanley's Jonas said in a note Tuesday. "Is the re-rating market/macro/factor driven, AI-driven? We think the market wants to believe Tesla is an AI name first, an auto company second." TSLA YTD mountain Tesla shares YTD Tesla is currently on its longest winning streak since its public debut, just as other stocks even tangentially tied to artificial intelligence enjoy a surge in investor interest. Nvidia is up 186% this year, and Apple has popped 41%. Shares of Microsoft have also rallied by 40%. Meta jumped 127%. "Auto investors are usually really good at 'attaching' stock narratives to the theme of the day. Today, it's all about AI," Jonas wrote in a June 5 note. "While we are sympathetic to how one can describe Tesla as an AI company, we still view it more as an auto company that has a non-disprovable AI bull case." Tesla shares are up 13 days in a row and counting. The electric vehicle company has only notched winning streaks of eight days or more just eight other times. These streaks correspond with double-digit percentage gains, Jonas said, but the stock's performance after they end can be choppy. One month after the streak's end, Tesla shares outperformed the S & P 500 by 3.4% on a median basis. Three months after the streak's end, however, Tesla shares lag the broader index by 13.8% on a median basis. In fact, Tesla shares have already surged past Jonas's base price target of $200, implying the stock could fall 20% from Tuesday's closing price of $258.71 per share. Still, the stock is also fast drawing near the analyst's bull case of $390, which actually represents 50% upside from Tuesday's close. That bull case is actually near the all-time high notched by Tesla in November 2021, buoyed by a broader rally in the equity market. Tesla shares were flat Wednesday. — CNBC's Michael Bloom contributed to this report. Correction: This story has been updated to reflect that Tesla's streaks correspond with double-digit percentage gains, Jonas said.

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What's behind Tesla's record winning streak? Top analyst Adam Jonas has a theory - CNBC
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