What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 3.7% in the morning session after the company received approval to begin testing its autonomous robotaxis in Arizona and Piper Sandler raised its price target on the stock.
This approval marked the third state, after Texas and Nevada, where the electric vehicle maker could test its self-driving cars. The move fueled investor optimism about the company's long-term growth in autonomous driving. Adding to the positive sentiment, Piper Sandler lifted its price target on Tesla to $500 from $400, citing increased confidence in the company's autonomous vehicle and robotics positioning. The brokerage noted the new target reflected a higher valuation multiple. This news resonated with bullish analysts like Dan Ives of Wedbush Securities, who previously stated that the robotaxi business could add as much as $1 trillion to Tesla's market cap.
After the initial pop the shares cooled down to $432.20, up 1.5% from previous close.
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What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 46 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 1.7% on the news that Baird upgraded the stock to "Outperform" from "Neutral" and substantially raised its price target. The analyst, Ben Kallo, boosted the price target to $548 from $320, a level that marked a new high on Wall Street. Baird's reasoning for the upgrade sidestepped recent performance, with the analyst noting a series of "less-than-stellar quarters." Instead, the firm argued that investors' attention shifted toward the company's future role in a coming "physical AI" era. The analyst's note suggested that the market now viewed Tesla as a leader in this space, looking beyond short-term results to focus on long-term initiatives.
Tesla is up 14% since the beginning of the year, but at $432.20 per share, it is still trading 9.9% 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 $3,056.
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