What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 7.6% in the morning session after the company launched its highly anticipated robotaxi service in Austin, Texas, impressing Wall Street.
The initial rollout was limited in scale, targeting a select group of investors and social media influencers. Despite its small scope, the launch reignited investor excitement about the company's potential to generate significant revenue from self-driving technology, signaling a shift in focus beyond its core electric vehicle business.
Wedbush analyst Dan Ives, who took two 15-minute rides, described the experience as "comfortable," "safe," and "personalized." Ives, who maintained a Buy rating on Tesla with a $500 price target, called the event "the beginning of Tesla's AI story.".
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What The Market Is Telling Us
Tesla’s shares are extremely volatile and have had 133 moves greater than 2.5% 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 13 days ago when the stock gained 3.5% as tension between CEO Elon Musk and President Donald Trump continued to cool off.
This de-escalation was a major relief for investors who had been worried about the potential negative impacts on Tesla's business, particularly regarding government contracts or regulatory scrutiny.
Also, there was growing optimism about Tesla's launch of its robotaxi service. Reports suggested a possible launch date as early as June 12th in Austin, Texas.
Tesla is down 6.5% since the beginning of the year, and at $354.64 per share, it is trading 26.1% 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 $5,311.
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