Tesla’s stock experienced a tumultuous Friday, initially dipping before reversing direction in response to a broader market recovery following a sell-off the previous day. However, despite this slight rebound, Tesla shares remain down approximately 9% since CEO Elon Musk accepted a significant $1 trillion pay package. As of the latest trading session, the stock was down by 5.9% over the week, having fallen below the crucial $400 support level before bouncing back to close at $404.35. This marks a notable decline, with the stock reaching lows not seen since September.
Several factors have contributed to this downturn, particularly the decreased likelihood of an interest rate cut by the Federal Reserve in December. This development has put pressure on riskier assets, including major tech companies like Tesla. Adding to the pressure are concerns regarding artificial intelligence spending, which have resulted in a flight to sectors that are considered to have less volatile valuations.
For investors focused on Tesla’s future, optimism surrounding artificial intelligence and autonomous technology remains a key area of interest. Morgan Stanley analyst Adam Jonas recently shared his outlook, suggesting that by 2026, Tesla could eliminate safety drivers from its Robotaxi test programs in Texas and at least one additional state. He forecasted that this could mark a significant transition in the perception of robotaxis from mere science fiction to practical reality for consumers and investors alike.
Musk, at a recent shareholder meeting, echoed this sentiment, stating that safety drivers for the Robotaxi in Austin would be removed by year-end. He also named Miami, Dallas, Phoenix, and Las Vegas as future cities for the Robotaxi service expansion.
Additionally, Jonas anticipates a closer integration between Tesla and Musk’s xAI (XAAI.PVT), especially in the context of developing the Optimus robot. He described the forthcoming Tesla robot production plant as the “mother” of next-generation robotics, predicting that the evolving capabilities of xAI in “truth-seeking” artificial intelligence will become increasingly vital.
Tesla announced plans to establish a production line for its Optimus robot capable of producing one million units at its Fremont, California factory, with an ambitious long-term goal of a 10-million-unit line at its Giga Texas facility. Currently, the Optimus robot is undergoing pilot production at the Fremont site.
Jonas maintains an Overweight rating on Tesla stock, with a short-term price target of $410 and a bullish scenario projecting a price of $800. Similarly, Dan Ives from Wedbush emphasized the significance of Tesla’s AI-driven future during a recent Yahoo Finance event, asserting that it is poised to become the most pivotal chapter in the company’s history.
