What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 3.3% in the pre-market session after Morgan Stanley analyst Adam Jonas named the stock a "Top Pick," citing the potential in the autonomous vehicle market and robotics. Jonas added that "Tesla's YTD auto deliveries have been mostly below expectations, but not particularly narrative changing. Tesla's softer auto deliveries are emblematic of a company in the transition from an automotive 'pure play' to a highly diversified play on AI and robotics."
Separately, CEO Elon Musk stated on social media platform X over the weekend that Tesla's profits could potentially grow by more than 1,000% over the next five years. But he didn't sugarcoat it, saying that kind of growth would take "outstanding" execution.
And let's be real, Tesla has a history of setting ambitious targets that aren't always easy to meet. Still, Musk's remarks could offer some reassurance to investors, especially with the stock struggling lately. It could also be interpreted as a sign that the company isn't backing down and is still focused on delivering big results.
After the initial pop the shares cooled down to $298.17, up 1.7% from previous close.
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What The Market Is Telling Us
Tesla’s shares are extremely volatile and have had 114 moves greater than 2.5% 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 6 days ago when the stock dropped 9.3% on the news that data from the European Automobile Manufacturers Association showed the company sold 9,945 cars in January 2025, a drop of 45% from last year, continuing a streak of weak sales in the region.
Separately, the trade debates are back after President Trump announced that the tariffs on Canada and Mexico will "go forward" when the temporary suspension expires in the coming week. This sparked fresh worries about supply chain issues and rising costs for companies that depend on cross-border trade, leading analysts to rethink the economic impact on affected industries.
Tesla depends on a worldwide supply chain, getting parts and materials from many countries. Tariffs could raise costs and squeeze Tesla's profit margins. Higher tariffs might also make Tesla's cars more expensive in North America, which could hurt sales in its biggest market.
Tesla is down 21.4% since the beginning of the year, and at $298.17 per share, it is trading 37.9% 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 $5,999.
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