‘Lottery tickets’
As a co-founder of Pacific Investment Management Company (PIMCO), Gross has built a legendary career in the bond market, earning him the nickname “bond king.” He’s also no stranger to meme stocks.
In a 2022 interview with Yahoo Finance, Gross remarked, “I simply think that the AMC and GameStop are lottery tickets.”
The investing legend was making bearish bets against those stocks at the time.
“If you can sell options that are out of the money levels, then ultimately these lottery ticket companies which have very little behind them, in my opinion, will go down,” he said.
GameStop (GME) has reclaimed the spotlight in 2024 with the return of Keith Gill, also known as Roaring Kitty, to social media. Gill became a pivotal figure in the GameStop stock phenomenon in early 2021 with his YouTube videos and social media posts. After a three-year hiatus on social media, he posted a meme on X on May 12, 2024 which ignited a 179% surge in GameStop shares in the following two trading days.
Although GameStop shares have pulled back from their peak, they remain up over 58% year to date.
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Read MoreNew bullish case?
To be sure, Tesla's recent rally was not entirely detached from its fundamentals. The company's shares experienced a multi-day winning streak coinciding with the release of its Q2 production and deliveries report.
During the quarter, the company delivered 443,956 vehicles, surpassing analysts’ expectation of 439,000 vehicles for Q2, a key metric closely watched by investors. On the day the report was released, Tesla shares jumped 10%.
Still, Gross’ concern about fundamentals is not without merit.
Although Tesla’s Q2 deliveries exceeded expectations, they represented a 4.8% decline compared to the 466,140 vehicles delivered in the same period last year.
Earlier this year, investors also harbored concerns regarding Tesla's performance. In Q1 of 2024, Tesla delivered 386,810 vehicles, which represented an 8.5% decline year over year — this marked the company's first annual decline in deliveries since 2020.
Despite these concerns, some Wall Street experts remain optimistic about Tesla’s prospects.
Morgan Stanley analyst Adam Jonas has an “Overweight” rating on Tesla, with a price target of $310, implying a potential upside of almost 20%.
Wedbush analyst Dan Ives is also optimistic about the EV maker. Ives maintains an “Outperform” rating on Tesla and has set a price target of $300, with the possibility of even further growth in a bullish scenario.
“We are raising our price target on Tesla from $275 to $300; new bull case of $400. We believe the Tesla demand story has made a significant turn for the positive heading into 2H/2025. Tesla AI story could be worth $1 trillion+ and is the most undervalued AI name in our view,” Ives explained in a post on X.
Tesla is scheduled to report Q2 earnings on July 23 after market close.
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