What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) jumped 1.7% in the morning session after 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.
After the initial pop the shares cooled down to $423.81, up 1.7% 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 4 days ago when the stock gained 5.9% on the news that CEO Elon Musk purchased approximately $1 billion of the electric-vehicle maker's stock, a move viewed by investors as a significant vote of confidence in the company.
According to regulatory filings, Musk acquired roughly 2.57 million shares in open-market transactions the previous Friday. This represents his first open-market purchase of Tesla stock since February 2020 and his largest ever by value. The disclosure sent shares surging as investors reacted positively to the news.
Dan Ives of Wedbush noted that the move "is a huge sign of confidence for Tesla bulls and shows Musk is doubling down on his Tesla A.I. bet." Adding to the positive sentiment, Barclays raised its third-quarter delivery forecast for Tesla to 465,000 vehicles, well above the consensus estimate of 430,000 units. The company also reportedly plans to accelerate production at its Berlin factory to meet strong European demand.
Tesla is up 11.7% since the beginning of the year, but at $423.81 per share, it is still trading 11.7% 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 $2,829.
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