What Happened?

Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 2.2% in the afternoon session after a Barclays analyst raised the company's price target. Barclays analyst Dan Levy kept an Equal-Weight rating on the stock but increased the price target by 27.27% to $350.00 from $275.00. Adding to the positive sentiment, the company's new extended-wheelbase Model Y L appeared to be fully sold out for two months in China, with new estimated delivery dates pushed to December 2025. This suggested strong demand for the new vehicle.

After the initial pop the shares cooled down to $439.77, up 0.1% from previous close.

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What Is The Market Telling Us

Tesla’s shares are extremely volatile and have had 49 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 5 days ago when the stock gained 3.4% on the news that Melius Research initiated coverage on the stock with a "Buy" rating and a price objective of $520. 

This optimistic view was supported by another analyst action, as Evercore ISI Group raised its price target on the company's shares from $235 to $300, although it kept its "In-Line" rating. Additionally, a company executive announced (according to Reuters) Tesla's key Shanghai factory will ramp up production in the fourth quarter, signaling an increased ability to meet strong global demand. This boost in potential output suggests higher future revenues. 

Contributing to the positive momentum, the major indices rebounded as signs of easing trade tensions between the U.S. and China emerged over the weekend The tech-focused Nasdaq Composite jumped around 1.7%, while the S&P 500 gained 1.2%. This rebound follows a significant sell-off the previous trading day, which saw the Nasdaq plummet 3.6% and the S&P 500 sink 2.7% after threats of new tariffs heightened fears of a trade war. Investor sentiment improved after the U.S. President adopted a more conciliatory tone toward Beijing in a social media post. The shift in language helped calm market jitters and spurred a broad-based rally as investors welcomed the potential de-escalation of the trade dispute.

Tesla is up 15.9% since the beginning of the year, and at $439.77 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 $3,062.

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