Why ChargePoint Stock Is Jumping Today

ChargePoint (NYSE: CHPT) stock is seeing significant bullish momentum in Thursday's trading. The company's share price was up 5.6% as of 3:45 p.m. ET, even though the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) were both down 0.4%.

ChargePoint stock is gaining ground today on the heels of Tesla publishing its delivery and production numbers for Q4 2024. While Tesla's Q4 delivery and production performance for the period came in below the average analyst estimate, the results were better than some investors had feared.

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What do Tesla's Q4 deliveries numbers mean for ChargePoint?

Tesla's production and delivery numbers are viewed as a bellwether for the broader electric vehicle (EV) industry. Over the last month, investors and analysts had become increasingly bearish on the company's Q4 performance. While the EV leader's fourth-quarter numbers came in below the average Wall Street target, they weren't as bad as some investors had feared.

Tesla reported that it had delivered 495,570 vehicles and produced 459,000 vehicles in Q4 last year. The performance meant that the company has recorded its first annual sales decline. For reference, analysts had expected the business to deliver 1.8 million vehicles in 2024 -- but the business only recorded 1.78 million deliveries across the stretch. Meanwhile, the company delivered 1.8 million deliveries in 2023.

Despite the Q4 miss, the performance was still better than some of the more recent bearish forecasts that had come in for Tesla's performance. As a result, ChargePoint and some other players in the EV space are seeing gains today.

What comes next for ChargePoint stock?

Tesla's Q4 results provide some indication of the overall market backdrop that ChargePoint is operating in. While Tesla's Q4 deliveries and production came in below the average target, not all forecasts included in the average are updated regularly. This means that the average is impacted by forecasts that were made when the outlook was more bullish.

So while Tesla's Q4 update wasn't particularly strong, it wasn't as bad as some investors had anticipated. For example, Stifel's analysts described the Q4 performance as a "modest negative." This suggests that beaten-down stocks including ChargePoint could have more rebound momentum in the near term. Even with today's gain, ChargePoint stock is down 52% over the last year.

On the other hand, Tesla's numbers do suggest a sluggish overall backdrop for the EV market that could extend through the next year and beyond. ChargePoint's ability to reach profitability hinges on adoption of EVs and the expansion of its charging network, and the company's valuation will face long-term pressures if overall performance on these fronts does not improve.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.