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Musk's Magic Touch Returns? Tesla Beats Estimates, Stock Up in Pre-Market

Tesla (TSLA) is proving its adaptability once again. After CEO Elon Musk declared it wasn't a car company during a sales slump, the stock price dipped. Now, with deliveries exceeding expectations, Wall Street sees Tesla back in the driver's seat (pun intended), and the stock is surging.

Over the past week, Tesla shares have skyrocketed more than 25%, fueled by strong vehicle deliveries that surpassed estimates. This impressive performance leaves the gains of the other "Magnificent Seven" tech companies in the dust. Adding to the excitement, the stock is trending pre-market, trading up 1.71% to $250.61.

Musk's earlier insistence that Tesla wasn't a car company was convenient during a sales slowdown, and arguably true. However, the recent rally highlights a double standard - Tesla can be both a tech leader and a car company when it suits them.

The stock's surge emphasizes the power of a best-in-class product - a lesson for AI startups. It also showcases the benefit of integrating AI ambitions into a broader business strategy, rather than making it the sole focus. However, it underscores that Tesla's lofty AI goals remain heavily tied to car sales success.

Musk's masterful salesmanship combines ambitious tech aspirations with the practical reality of selling cars. Dan Ives, a vocal Tesla supporter from Wedbush Securities, captured the sentiment in a recent note, stating, "We believe the worst is behind us for Tesla. The EV demand story appears to be returning to the disruptive tech stalwart."

This upbeat delivery data counters a wave of recent pessimism. Stiff competition in China, softening demand at home, price cuts, layoffs, and Musk's personal and corporate dramas caused Tesla to lag behind the "Magnificent Seven." However, recent victories have a way of erasing past losses. With an upcoming earnings report and the highly anticipated robotaxi unveiling, Tesla is riding a wave of positive momentum.

Investors are clearly buying into the shift. Since hitting a low in late April, Tesla's stock price has risen over 60%.

But even some Tesla bulls are cautious. While deliveries did outperform expectations, they still fell compared to the same period last year. Additionally, the impact of increased competition and lower prices on profitability remains unclear.

Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, offered a critical perspective, saying, "Tesla's EV sales were actually down 5%. They seem to be accepting the reality of selling EVs. The focus seems to have shifted to FSD and robotaxis now." (FSD refers to Full Self-Driving)

Tesla's ability to shift between car company and tech company can be a double-edged sword. It raises questions about the company's long-term strategy. Is Tesla still aiming for a mass-market EV in every driveway? Or are they evolving into a platform managing a fleet of autonomous taxis, pushing the boundaries of AI technology?

The answer could be both. Musk has a history of wanting it all. And investors seem content with this approach, as long as the company's numbers continue to climb. For now, AI and strong car sales are both contributing to Tesla's success.

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