What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 4% in the afternoon session after CEO Elon Musk announced that its Robotaxi service in Austin, Texas, will open to the public next month, a significant milestone for the program. This development follows a limited launch of the service in June and comes as the company is also seeking approval to operate autonomous vehicles in Arizona. Adding to the positive sentiment, Tesla applied to British regulators to become a power supplier in the U.K., signaling a strategic expansion into the energy market and an effort to diversify revenue streams. The optimism around Tesla's autonomous technology was further supported by Musk's comments about the next Full Self-Driving software update, FSD V14, which he teased would be a "dramatic gain" with significant improvements.
After the initial pop the shares cooled down to $340.26, up 3.2% from previous close.
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What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 3.7% on the news that Morgan Stanley upgraded its rating on the stock to 'overweight' from a previous dropped coverage and set a price target of $410. The upgrade was part of a wave of positive developments for the electric vehicle maker. CEO Elon Musk also announced that the company is testing a new Full Self-Driving (FSD) model with significant improvements, which could be released by the end of September. Adding to the bullish sentiment, new regulatory filings in China revealed upcoming longer-range variants of the Model 3 and Model Y L, with the new Model 3 set to become Tesla's longest-range vehicle with a range of up to 830 kilometers. These product enhancements and advancements in autonomous driving technology appear to be resonating with investors.
Tesla is down 10.3% since the beginning of the year, and at $340.26 per share, it is trading 29.1% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $3,714.
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