What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 3.1% in the morning session after its board of directors approved a new multi-billion dollar compensation package for CEO Elon Musk. The package, which included an award of 96 million shares valued at nearly $30 billion, reassured investors by securing Musk’s continued leadership. This move was particularly significant because Musk had previously suggested he might develop products outside of Tesla if his ownership stake was not increased. The board's action came after a court had previously voided a different pay package. The stock's climb also occurred during a broader market upswing that lifted other large technology companies.
After the initial pop the shares cooled down to $307.98, up 1.8% from previous close.
Is now the time to buy Tesla? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 48 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 7 days ago when the stock gained 4% on the news that the company announced a significant, multi-billion dollar contract with Samsung Electronics to produce its next-generation AI chips. The deal, valued at approximately $16.5 billion, secured a long-term supply of semiconductors for Tesla through the end of 2033. Tesla CEO Elon Musk confirmed the partnership, stating that Samsung's new factory in Texas would be dedicated to manufacturing Tesla's next-generation "AI6" chip. These advanced chips were designed to power key future products, including the company's humanoid robots and self-driving vehicle technology. The news helped the stock recover after the company reported disappointing second-quarter financial results.
Tesla is down 18.8% since the beginning of the year, and at $307.98 per share, it is trading 35.8% 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 $3,107.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
