It might come as a shock to investors to hear that US electric vehicle and battery manufacturer Tesla Inc (NASDAQ: TSLA) has had a bad month. After all, Tesla shares were up a staggering 171% year to date in 2023 — up to 18 July.
But since that date, the Elon Musk-helmed company has been steadily losing value. After topping out at US$290.38 as of market close on 17 July, the company has now lost more than 22% of its value. Yep, last night, Tesla stock closed at US$225.60 a share, the lowest price the company has been at since early June.
So there are probably more than a few investors out there wondering if this is a buy-the-dip opportunity for the world's largest car maker (by market capitalisation). Remember, most dips that Tesla shares have suffered in the past have certainly been good times to get in in hindsight. Take a look at the graph below if you need convincing:
Is it time to buy the dip?
By now, most Tesla investors would be familiar with this company's growth trajectory. For a recap, earlier this month, we covered how Tesla has successfully navigated growth from producing 367,500 vehicles in 2019 to the 1.31 million it delivered last year. Elon Musk has stated before that he is expecting this growth to continue in the coming years.
But this is arguably already baked into the Tesla share price. To illustrate, Tesla currently has a price-to-earnings (P/E) ratio of 64.04. In stark contrast, its automotive rival Toyota presently trades on an earnings multiple of just 10.65. In the US, General Motors is languishing at a P/E of 4.58 right now.
But perhaps vehicle delivery growth isn't the only bullet Tesla has in its chamber.
Our Fool colleagues in the United States recently pointed out that Musk has just announced that Tesla has made a huge breakthrough in artificial intelligence (AI). Here's his Twitt.. sorry, X post:
AGI refers to 'artificial general intelligence', reportedly the (somewhat frightening) milestone when AI technology can solve any problem a human can solve.
Is Tesla an AI stock?
If Musk and Tesla are really making gains in this area, it could help with the eventual rollout of Tesla 'robotaxis'. This concept, which involves Tesla owners 'renting' out their cars as autonomous taxis, has been flagged by Musk before. But if the company can pull it off, it would immediately place it in the top realm of the world's AI shares.
Tesla cheerleader ARK Invest has stated that it thinks Tesla could end up with a market capitalisation of US$8 trillion if it can manage to develop and roll out a robotaxi service.
But at the end of the day, this probably isn't going to change any minds. Despite the past success of Tesla shares, the investing world seems to remain divided into two camps. There are those that think Tesla is on its way to becoming the largest company in the world. And there are those that think Tesla is overvalued and Musk is a flashy con man.
As such, the recent dip in the Tesla stock price is probably a good buying opportunity for any investor who thinks the company's best days are in front of it. But those in the other camp are probably getting some vindication over Tesla's 20% fall over the past month.
