Why Shares of Tesla Are Beating the Market Today

Shares of the electric carmaker Tesla (NASDAQ: TSLA) traded 4.3% higher today, as of 2:34 p.m. ET, well ahead of major market indexes. Tesla CEO Elon Musk reportedly told company employees in a meeting earlier today to "hang on to their stock."

Urging people to buy the dip

After a major rally following President Donald Trump's election win, Tesla stock is down about 35% this year. Not only is Musk telling employees to hang in there, but officials in the Trump administration are also trying to rally investors to buy the dip. U.S. Commerce Secretary Howard Lutnick, who previously ran the investment bank Cantor Fitzgerald, urged investors to buy Tesla stock during a television interview on Fox News Wednesday night.

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Retail investors seem to be listening. Bloomberg reported today that retail traders bought more shares than they sold for 13 straight trading days through yesterday, equating to about $8 billion of inflows, according to data from JPMorgan Chase. This is the largest amount of consecutive buying of the stock since 2015.

In some not so great news for Tesla, CNBC reported that customers are trading in new and used Tesla vehicles at record pace in March, according to car shopping company Edmunds. The data specifically looks at people swapping their Teslas for new or used cars at dealerships selling other brands.

A battleground stock

Tesla has clearly become a battleground stock, with many Wall Street analysts torn. One camp of investors is worried about first-quarter deliveries, citing numerous data points. The other camp suggests near-term catalysts from the company's self-driving and robotic divisions are not priced in.

While these catalysts may eventually come to fruition, the stock still trades at close to 92 times forward earnings and it may experience an intense move once the company reports first-quarter earnings, so I'm personally staying on the sidelines right now.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase and Tesla. The Motley Fool has a disclosure policy.