As we survey the worldwide inventory market winners and losers of 2024, it’s honest to say that Tesla (NASDAQ: TSLA) occupies the previous class. However how a lot would an investor have made in the event that they’d purchased £20,000 value of the electrical automotive firm’s shares in the beginning of the yr? And would they be sensible to stop whereas they’re forward?

Ending 2024 with a flurry

Tesla’s huge 68% acquire belies the truth that the overwhelming majority of this return solely got here within the final couple of months. For a lot of the yr, the inventory has been fairly risky, bouncing between a spread of $150 and $250 a pop. That behaviour makes fairly a little bit of sense contemplating the blended information circulation surrounding the corporate and its ‘unique’ CEO.

Whereas car manufacturing handed the seven million milestone, a considerable variety of automobiles had been recalled for probably harmful glitches (like defective warning lights). Tesla additionally skilled issue in assembly some analyst projections, though a minimum of a few of this was as a result of funding in different initiatives. The revealing of the Cybercab was met with some derision too.

Nonetheless, none of that appeared to matter as soon as Elon Musk selected to enthusiastically again Donald Trump’s marketing campaign to return to the White Home. The latter’s subsequent election victory in November — and the probability that he would shake up regulation to learn the previous — put a veritable rocket below the Tesla share price.

Going again to our investor, a fast calculation leaves their preliminary £20,000 stake now being value £33,600. That’s an exquisite return, after all, and additional proof of how profitable inventory choosing has the potential to be.

However I reckon it leaves holders in a tough spot.

Is Tesla now dangerously overvalued?

At $1.31trn, Tesla’s market capitalisation nonetheless considerably lags different members of the Magnificent Seven. Nonetheless, the inventory now stands head and shoulders above all the things else when it comes to valuation. That doesn’t imply it may well’t go greater in 2025. However the Austin-based enterprise in all probability wants to begin blowing the doorways off when it comes to earnings progress. Talking of which, the subsequent set of numbers needs to be with us by late January.

Whether or not Musk’s blossoming friendship with Trump begins to wilt or not, I can’t assist however assume that his involvement within the new administration additionally means he’s at risk of spreading himself much more thinly. Certainly there should come a degree — critics would say we’re already there — the place spinning so many plates dangers impacting his judgement?

Sensible to wager towards Musk?

However this, betting towards the world’s richest particular person hasn’t labored thus far. I keep in mind when it felt like each dealer and his canine was short-selling Tesla inventory. Whereas I by no means joined them, I used to be actually sceptical as as to whether the corporate might really ship. Extra Idiot me.

One also needs to keep in mind that Tesla is a multi-headed beast. Certainly, galloping gross sales at its power era and storage division had a giant hand in permitting the corporate to report better-than-expected earnings over Q3.

All that mentioned, I choose to get my publicity to Tesla shares through funds and trackers somewhat than immediately. Whereas this implies I missed out on the massive acquire delivered in 2024, it’ll assist to cushion the blow if 2025 isn’t fairly so variety.