Tesla has led a bounce-back for US tech stocks as its shares surged by as much as 20% partly thanks to figures showing higher sales in China.
The electric car company, led by Elon Musk, was also boosted by an analyst upgrade and a wider upturn in investor sentiment which saw the tech-heavy Nasdaq index climb nearly 4%.
Tesla’s shares have had a wild ride over recent months, with Mr Musk for a time becoming the world’s richest person as the stock surged before losing the crown as it slipped back from its highs.
The stock was partially boosted by China sales figures
On Tuesday it was the stand-out performer among a host of tech stocks as they staged a recovery after sharp losses in recent weeks.
Apple, Amazon and Microsoft were all among those making gains.
They are among “stay at home” stocks that have been big winners during the pandemic but more recently have come off those highs.
That is partly because investors are now pricing in faster economic growth, higher inflation – and higher interest rates.
Those higher rates make it relatively less attractive to park cash in tech companies – investments which are often bets that those companies will turn profitable years into the future.
The shift in sentiment pushed the Nasdaq into so-called “correction” territory at the start of this week, meaning it was more than 10% below its peak closing level, seen on 12 February.
Tesla is now the world’s most valuable car maker Pic: AP
On Tuesday, the index bounced back as markets continued to readjust.
Tesla has been at the heart of market volatility in recent months, last year soaring to become the world’s most valuable car maker despite producing a fraction of the volume of vehicles made by more conventional rivals.
It only recently reported it first ever annual profit – and only then thanks to the sale of carbon credits to less environmentally-friendly companies.
Tesla’s value has also been linked to the fluctuating fortunes of Bitcoin, after revealing a $1.5bn investment in the cryptocurrency.
Its jump on Tuesday – adding more than $100bn to its market capitalisation – came after an increase in sales of its Chinese-made vehicles from 15,484 in January to 18,318 in February.
Tesla was also boosted by one analyst raising his rating of the stock to “buy” from “neutral”.
The shares are still more than 20% lower than their January record high but are up by 70% over the past six months.