Why the Tesla Semi could be the catalyst the stock needs

Tesla (TSLA -3.45%) is a leading electric vehicle (EV) company, but it’s been struggling to win over investors this year. Since January, it’s declined by about 20%. It has, however, been rallying in recent weeks, as investors have appeared intrigued by the stock briefly falling below $300, prompting a flurry of buying afterward and indicating strong support around that level.

Recently, the company made a big announcement, and it’s one that could give investors more of a reason to be more bullish on the stock moving forward: it’s begun delivering its Semi trucks.

Why the Tesla Semi could be the catalyst the stock needs

Although it’s been years since the company announced plans for the Tesla Semi, deliveries of the heavy-duty electric truck have finally begun. The company has also started producing it in high volumes and says it has the capacity to produce up to 50,000 per year.

If the trucks are well received and the early reviews are promising, that could lead to much more excitement for Tesla’s stock. The autonomous truck market is a fast-growing opportunity where Tesla could be a major future player. Analysts at Grand View Research estimate that it was worth $46.8 billion last year and will grow to $139.5 billion by 2033 — translating into a compounded annual growth rate of 14.8%. Europe has accounted for the largest share of the market thus far, but the opportunity remains in its early stages, particularly in the U.S., where Tesla could dominate.

For businesses, the Tesla Semi could improve efficiency and reduce costs, potentially unlocking a massive growth opportunity for the business. It could also give Tesla a way to strengthen its margins, as intense EV competition for cars has weighed on its earnings and has made investors less bullish on the stock overall.

Will Tesla’s stock rally before the end of the year?

Tesla’s stock isn’t cheap, as it’s trading at well over 300 times its trailing earnings. But if the company can give investors reason to be optimistic about the future, such as encouraging early sales numbers for the Semi, that could be what gives the stock a boost before 2026 comes to a close. But there’s no guarantee that will happen.

Unfortunately, with no margin of safety priced into the stock at such an elevated premium, the safest and best option for investors may be to take a wait-and-see approach. At the very least, investors may want to wait until the company releases its latest earnings to gauge demand for the Semi before deciding whether to buy the EV stock.