Today marks an important day for Tesla (NASDAQ:TSLA); Aug. 17 is the date of record for the TSLA stock split. While only investors who owned shares at close of markets yesterday will now receive additional shares, TSLA remains a strong buy.
This split will boost share prices significantly, as both fans and investors already know. Yes, TSLA stock is down 1% today, but Wall Street still has plenty of reason to be optimistic about the company. That’s because splitting a stock often pushes shares up as new investors buy in at lower prices. And a high-growth tech company like Tesla is sure to have many investors rushing to buy.
Let’s take a closer look at what the split means for TSLA stock.
TSLA Stock: A Post-Split Buy
InvestorPlace contributor David Moadel recently described TSLA stock as a “must-buy” ahead of the split. He noted that as shares become more affordable, traders with “smaller account sizes will probably be enticed to invest.”
This point is well-taken. What’s more, opting for a stock split makes perfect sense for Tesla. The company has demonstrated an ability to grow throughout an otherwise highly turbulent year. After plunging to almost $600 per share in May, the stock has rebounded since. It currently trades above $900 per share.
Opening TSLA stock up to new, smaller-scale investors through a split is the next logical step forward. Retail investors don’t have hedge-fund capital to pour into large-cap stocks. But there are enough of them to potentially apply “upward price pressure,” causing shares to rise. By that logic, it also makes sense for prospective investors to buy into TSLA stock soon before post-split momentum pushes up shares.
More Growth Catalysts Ahead
The TSLA stock split isn’t the only reason investors should be excited about Tesla. InvestorPlace‘s
“As this new credit incentivizes middle class buyers to ‘go electric,’ Tesla stands to benefit from the sale of its existing models that qualify, as well as from the rollout of economy cars.”
Navellier sees other growth areas for TSLA stock, too, including the upcoming releases for the company’s Semi and Cybertruck models. These highly anticipated EVs will help Tesla boost sales and remain competitive with legacy automakers like General Motors (NYSE:GM) and competitors like Rivian (NASDAQ:RIVN).
The cherry on top? Tesla recently announced that it has produced more than 3 million cars, an important milestone. The company has been growing steadily and is well-positioned to continue scaling production.
All in all, investors can still benefit from the growth TSLA stock will see after the split.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.