An AI Perspective On When To Buy Tesla Stock

Investors watching electric vehicle giant Tesla (NASDAQ: TSLA) are receiving a word of caution from an unconventional analyst: artificial intelligence. A model from OpenAI’s ChatGPT has suggested that while the long-term outlook for the company remains bullish, current market conditions may not be the most opportune for purchasing shares.

Tesla's stock has demonstrated considerable strength, maintaining its position above the $300 mark and surging by almost 50% since its low point in April. At the most recent market close, the stock was valued at $329, reflecting a 3% gain for the day.

TSLA one-week stock price chart. Source: Finbold

However, the AI's analysis highlights upcoming events that could introduce significant market volatility.

AI's Advice: Wait for the Earnings Report

The central piece of advice from the AI analysis is that investors might be better off waiting until after Tesla announces its second-quarter earnings on July 23. This period is historically volatile for Tesla, with the stock price often fluctuating between 7% and 10% immediately following an earnings release.

Analysts are currently forecasting weaker revenue and earnings per share. If Tesla does not meet these expectations, the stock could see a substantial pullback, which could offer a more attractive entry point for investors.

Key Risks and Headwinds to Consider

Beyond the immediate earnings report, the AI pinpointed several other risks that could affect Tesla's stock performance.

A significant factor is the possible elimination of the $7,500 U.S. EV tax credit by September, an event that could negatively impact consumer demand. Furthermore, the increasingly divisive public image of CEO Elon Musk presents a risk, as it has the potential to alienate certain customers and ESG-focused investors.

Growing market competition from rivals such as BYD, Waymo, and Xiaomi is also applying pressure to Tesla’s dominant position in the electric vehicle and autonomous driving industries.

Potential Catalysts and Ideal Entry Points

Despite the cautionary notes, the AI also recognized positive long-term drivers. Future events could change market sentiment, especially the company's robotaxi event planned for August 8. A compelling and clear roadmap for autonomous driving could spark considerable optimism among investors.

Long-term innovations, like the Dojo supercomputer and progress in monetizing its Full Self-Driving (FSD) technology, continue to be fundamental to the investment case.

According to ChatGPT, if the earnings report is disappointing, a more appealing entry point might be found in the $270 to $290 range. On the other hand, if earnings exceed expectations, the stock could climb higher, but buying into that surge could be risky. For those with strong long-term conviction, a dollar-cost averaging strategy between $300 and $310 might be a prudent move if the stock trades sideways.

Ultimately, the AI’s guidance suggests that patience is the wisest course of action. Waiting until after the July 23 earnings call will likely provide greater clarity and a potentially more strategic entry point below $300 for medium-term investors.