What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 3.8% in the afternoon session after Wedbush analyst Dan Ives reiterated his $600 price target, declaring 2026 a pivotal "monster year" for the EV giant.
Ives argued that Tesla is "taking major steps in advancing its AI Revolution path," with autonomy and robotics set to be the "game changer" that defines the company's future. Optimism was further strengthened by reports of driverless Model Y testing in Austin, validating the thesis that the robotaxi timeline is accelerating.
After the initial pop the shares cooled down to $477.19, up 4% from previous close.
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What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 42 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 dropped 4.1% on the news that Morgan Stanley downgraded the stock to "Equal-Weight" from "Overweight," citing concerns that the company's valuation was too high.
The bank's new analyst covering the stock, Andrew Percoco, noted that while Tesla was a leader in electric vehicles, manufacturing, and AI, its stock price appeared to be trading near its fair value. Despite the downgrade, Morgan Stanley actually increased its price target on the shares to $425 from $410.
However, this new target was below where the stock was trading. The analyst predicted a "choppy trading environment" for the shares through 2026 and expressed a more cautious outlook on the broader EV industry, forecasting Tesla's 2026 auto volume to be below consensus estimates.
Tesla is up 25.8% since the beginning of the year, and at $477.19 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 $2,261.
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