What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 3.1% in the afternoon session after Wall Street analysts raised their price targets on the company, citing optimism over its artificial intelligence-driven initiatives, robotaxi rollout, and humanoid robotics business.
The stock's gain marked a comeback after a fall in the previous session that was linked to data showing a sales decline in Europe. Analysts at Wedbush and Deutsche Bank showed renewed confidence. Wedbush increased its price target to a Street-high of $600 from $500, stating that Tesla was advancing its path toward an "AI Revolution."
Deutsche Bank also lifted its price target to $435 from $345 ahead of the company's third-quarter delivery report. Both firms kept their "Buy" ratings. The positive sentiment was further supported by more recent sales data, which showed a strong rebound. For instance, new Model Y registrations in Sweden saw a significant increase compared to the previous month, and the company posted its strongest European registration week of the third quarter.
After the initial pop the shares cooled down to $438.17, up 3.5% 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 1 day ago when the stock dropped 3.1% as reports surfaced of another month of declining sales in Europe, where the company was outsold by a key competitor.
Data from the European Automobile Manufacturers' Association showed Tesla sold 8,220 cars in the European Union in August, a drop of about 37% from the same month a year prior. For the year-to-date, Tesla's sales in the region had fallen 43%. In sharp contrast, Chinese competitor BYD sold 9,130 vehicles in August, a 201% increase, marking the second consecutive month it surpassed Tesla's sales in Europe.
Tesla is up 15.5% since the beginning of the year, and at $438.17 per share, it is trading close to 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 $3,121.
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