Why Tesla Inc. Stock Popped Tuesday

What happened

Shares of electric-car and renewable-energy company Tesla (NASDAQ:TSLA) popped on Tuesday, rising as much as 5.8%. As of 11:45 a.m. EDT, the stock was up 4.9%.

The stock's rise follows a bullish note from Macquarie Research, where an analyst predicts big gains for Tesla stock, citing its unique products, strong presence in fast-growing markets, and path to profitability.

A Tesla Model 3 parked in the garage of a house with a Powerwall and Tesla Solar Roof

Image source: Tesla.

So what

Macquarie Research analyst Maynard Um initiated coverage on Tesla stock with a $430 12-month price target, representing 63% upside from where shares are trading at the time of this writing.

"We view Tesla as a disruptive technology growth company with differentiated products and strong brand presence in the secularly growing and equally disruptive markets of electric vehicles, energy storage, and energy generation," Um wrote in a note to clients Monday evening (via CNBC).

And he expects Tesla to achieve its goal of becoming profitable in the second half of the year.

Now what

This bullish outlook for Tesla stock follows a quarter of sharp growth in the company's vehicle deliveries. Driven primarily by a 203% sequential increase in Model 3 deliveries, Tesla's third-quarter vehicle deliveries were up 219% year over year.

In Tesla's second-quarter shareholder letter, management said that if Model 3 production went as planned, the company could become profitable during the second half of the year. Since third-quarter Model 3 deliveries were in line with the company's guidance, the company might have achieved profitability during the quarter. But investors won't know for sure until Tesla reports its third-quarter results.

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