Why Is Tesla (TSLA) Stock Rocketing Higher Today
What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) jumped 6.1% in the afternoon session after dovish comments from Federal Reserve Chair Jerome Powell sparked a broad market rally, boosting investor sentiment for risk assets. Powell's remarks at the Jackson Hole Symposium were interpreted by traders as hinting at a potential interest rate cut, which is often seen as a positive for stocks. The news lifted risk assets and sparked a broad market rally, with large technology companies seeing significant gains.
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What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 45 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 11 days ago when the stock gained 4% on the news that CEO Elon Musk announced that its Robotaxi service in Austin, Texas, will open to the public next month, a significant milestone for the program. This development follows a limited launch of the service in June and comes as the company is also seeking approval to operate autonomous vehicles in Arizona. Adding to the positive sentiment, Tesla applied to British regulators to become a power supplier in the U.K., signaling a strategic expansion into the energy market and an effort to diversify revenue streams. The optimism around Tesla's autonomous technology was further supported by Musk's comments about the next Full Self-Driving software update, FSD V14, which he teased would be a "dramatic gain" with significant improvements.
Tesla is down 10.7% since the beginning of the year, and at $338.53 per share, it is trading 29.5% 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 $2,521.
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Billionaire Stanley Druckenmiller Just Dumped Tesla and Piled Into a "Magnificent Seven" Stock That's Crushing the Stock Market This Year
In this article: Key Points
Hedge funds recently filed their latest batch of 13F forms with the U.S. Securities and Exchange Commission, divulging what stocks they held at the end of the second quarter. Comparing those forms to the prior set allows investors to see what stocks hedge funds and billionaires have bought and sold in any given quarter.
The market is always curious to see how the leading names in the investing world are allocating capital. Few billionaire investors elicit more interest than Stanley Druckenmiller. A protege of George Soros, Druckenmiller consistently generated some of the highest annual returns out there at Duquesne Capital, which he founded and ran for decades. Now, he operates the Duquesne Family Office, which manages his own billions.
In the second quarter, Druckenmiller exited his position in Tesla (NASDAQ: TSLA) and piled into another "Magnificent Seven" stock that has crushed the broader stock market this year.
Dumping Tesla
The Duquesne Family Office didn't own its stake in the electric vehicle (EV) maker for too long. The fund initiated its Tesla position in the fourth quarter of 2024 and closed it in the second quarter. Druckenmiller is not afraid to trade in and out of stocks, or to sell a stock if he feels it has become too expensive, as he did in the past with Nvidia.
Unlike many investors in this red-hot market, Druckenmiller has always been a close observer of valuations, and Tesla is certainly one of those names that has for many years traded at meteoric valuations. As of Thursday, the stock was trading at about 190 times expected forward earnings. Meanwhile, Tesla's core EV business has been struggling in recent quarters. With the federal $7,500 EV tax credit set to expire at the end of the third quarter, the EV industry broadly could continue to struggle.
However, many investors seem less concerned about Tesla's EV business and more focused on how the company's other initiatives, such as robotaxis and humanoid robots, could power its results in the future.
Tesla intends for its self-driving robotaxis to form the backbone of a new autonomous ride-hailing fleet, giving it access to a huge market in the personal transport space. Some early analyses indicate that Tesla's approach to autonomous vehicle systems is much cheaper than rivals like Waymo. Tesla has begun to deploy robotaxis (though not its Cybercabs, which it has yet to produce) in Austin and San Francisco. However, while these vehicles are driving autonomously, they have reportedly been geofenced to stay within set boundaries of those cities, and have been operating with humans monitoring them remotely thus far.
Here's Why Chinese Electric Vehicle Maker Nio Shot Up Today
In this article: Key Points
A reduction in the price of electric vehicles has a much larger impact than the same reduction in price of a conventional vehicle.
Nio's development of a more affordable car lays a marker down for what Tesla should do.
Shares in Chinese electric vehicle (EV) automaker Nio (NYSE: NIO) soared by more than 14% by 11:30 a.m. ET today. The rise follows the launch of its new premium sport utility vehicle (SUV). Nio is primarily a player in the domestic market in China, and this latest model, which comes with a near 26% discount if bought on a battery-as-a-service (BaaS) basis, is seen as offering EV buyers a more affordable way to purchase a premium SUV.
Price matters for electric vehicles
There's an interesting comparison to be made with Tesla here, in that the market is rewarding an EV maker when it releases a lower-cost model, and particularly an SUV. Tesla's SUV Model Y's sales are declining this year in the face of aggressive competition, and the company is responding by releasing a lower-cost Y model later in the year.
The issue of cost is critical to companies like Nio and Tesla, because EVs tend to have higher upfront costs, but much lower maintenance and fueling costs than internal combustion engines (ICE). As such, a reduction in the upfront cost to the consumer of an EV has a disproportionate impact on the long-term value of the car compared to the same cost reduction on an ICE car.
What Tesla needs to do
This understanding is why Nio is being rewarded today and why Tesla could also be rewarded if it continues cutting its cost per vehicle, thereby enabling production of more affordable cars. It also explains why the robotaxi concept is an integral part of the case for Tesla and EVs. Simply put, high upfront costs and low running costs mean the optimal use of an EV is as a highly driven vehicle.
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Tesla (TSLA) Robotaxi Demo Wows Analysts Ahead of September Launch
In this article: Tesla, Inc. (NASDAQ:TSLA) is one of the Must-Watch AI Stocks for Investors. On August 19, William Blair analyst Jed Dorsheimer reiterated a Market Perform rating on the stock. The rating affirmation follows the demo of Tesla’s robotaxi service in Austin prior to the September public launch.
“Our main takeaway was that we experienced a glimpse of the future, and it is exciting. The comparisons are immediate and stark—multiple times we drove past Waymo and Zoox vehicles outfitted with their complex sensor suite that stick out like a sore thumb. In contrast, the robotaxis blended in with all the other Teslas on the road; we felt inconspicuous flowing with the traffic.”
The firm stated that Tesla’s autonomous vehicles have been blending in with all the other Teslas on the road, unlike Waymo and Zoox who sport complex sensor suites that “stick out like a sore thumb.”
Bocman1973 / Shutterstock.com
“Confirming our thesis, robotaxi was half the price of Uber (UBER $93.98; Outperform), demonstrating its ability to win market share by weaponizing price. Despite our enthusiasm for robotaxi, we acknowledge there is a period of margin headwinds that investors must endure from pending regulatory cuts as part of the OBBB, and thus, we maintain our Market Perform rating.”
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
While we acknowledge the potential of TSLA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 10 AI Stocks In The Spotlight For Investors and 10 Trending AI Stocks on Wall Street
Disclosure: None.
This Nvidia-Backed Stock Just Announced a New Technical Breakthrough That Could Rival Tesla
In this article: WeRide (WRD), the autonomous driving company backed by Nvidia (NVDA), just unveiled WePilot AiDrive, a revolutionary one-stage end-to-end advanced driver-assistance system (ADAS) that could fundamentally challenge Tesla's (TSLA) Full Self-Driving (FSD) dominance. This breakthrough represents a significant leap beyond traditional two-stage autonomous systems.
Typically, conventional approaches separate sensing and decision-making into distinct processes. However, WePilot AiDrive integrates both functions into a unified architecture, enabling vehicles to "see and act" simultaneously, mimicking skilled human drivers. This innovation delivers faster response times, efficient routing, and superior fault tolerance compared to existing systems.
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Developed in partnership with Tier 1 supplier Bosch, the technology has completed core function validation and is expected to enter mass production later in 2025. The system has showcased remarkable capabilities across complex scenarios, including lane changes in heavy traffic, navigation around unplanned construction, unprotected intersection turns, and intricate interactions with pedestrians and obstacles in urban environments.
WeRide’s Widening Ecosystem
WeRide's technical advantages are compelling. The scalable computing architecture runs on high-performance platforms while scaling down to mid- and low-power setups through model distillation. Its proprietary middleware decouples algorithms from hardware, enabling rapid adaptation across different platforms. The system supports both pure vision and multi-sensor fusion configurations, providing flexibility that Tesla's camera-only approach lacks.
The WePilot AiDrive employs extensive driving data to automatically generate training labels and continuously improve performance, a capability that strengthens with each mile driven. This creates a self-improving system that handles edge cases and long-tail scenarios effectively over time.
WeRide has also achieved another milestone: approval for late-night Robotaxi testing in Beijing's challenging conditions. Equipped with over 20 sensors, including high-precision cameras and LiDARs, the system achieves 360-degree coverage with a 200-meter detection range, ensuring stable operation even in poor lighting and adverse weather.
EU considers blockchains like Ethereum and Solana for digital euro: report
In this article: Alarmed by the growth of dollar-pegged stablecoins after the US’ passage of the Genius Act, European Union officials are considering launching a digital euro on a public blockchain such as Ethereum or Solana, the Financial Times reported on Friday.
In a statement, the European Central Bank told the paper it was considering “different technologies — both centralised and decentralised — in the development of the digital euro, including distributed ledger technologies.”
Previously, the EU’s planned central bank digital currency, or CBDC, was expected to be launched on a private network due to official’s concern that tokens issued on public blockchains could compromise users’ privacy.
According to the Financial Times, however, conversations within the EU changed after the US passed the Genius Act in July, a landmark federal law that makes it easier for major corporations to issue their own stablecoins.
The law’s proponents argued the Genius Act would be a boon for stablecoins and, in turn, US dollar dominance.
That sentiment was echoed by Pierre Gramegna, the managing director of European Stability Mechanism, a European Union intergovernmental organisation.
“And, if this were to be successful, it could affect the euro area’s monetary sovereignty and financial stability,” Gramegna said in March, referring to the success of dollar-backed stablecoins.
To tackle this threat, he urged the European Central Bank to make “the digital euro a reality to safeguard Europe’s strategic autonomy.”
One EU official, quoted anonymously, told the FT the passage of the Genius Act “rattled a lot of people” who now want to accelerate the development of a digital euro.
ECB leaders and EU officials say a digital euro could bolster Europe’s financial autonomy by creating a home-grown payment system to rival American payment giants like Visa.
While EU officials worry about the privacy implications of launching a token on a public blockchain, the digital euro has nevertheless been fraught with controversy and conspiracy theories since the ECB launched its investigation in 2021.
Many consumers want to avoid a Big Brother scenario where the central bank would be able to digitally track their spending with CBDCs.
To assuage that concern, the ECB said it would not have access to personal data. That would remain with commercial banks, which would need to host the digital euro.
Citing the potential for government surveillance, Republican lawmakers in the US have sought to preempt the development of any CBDC.
The week, the House of Representatives passed the annual National Defense Authorization Act, which includes a provision to block the Federal Reserve from issuing a digital dollar.
Aleks Gilbert is DL News’ New York-based DeFi reporter. You can reach him at aleks@dlnews.com.
Intel announces $8.9 billion investment from US government, which will own 9.9% of chipmaker
In this article: The US government has taken an $8.9 billion, 9.9% stake in Intel (INTC), buying 433.3 million shares in the chipmaker at a price of $20.47 per share.
The government’s investment in Intel will be passive ownership, with no Board representation or other governance or information rights, Intel said in a statement. Intel said the government also agreed to vote with the company's Board of Directors.
Intel said the government's equity stake will be funded by the remaining $5.7 billion in grants previously awarded but not yet paid to Intel under the US CHIPS and Science Act and $3.2 billion awarded to the company as part of the Secure Enclave program.
Intel will continue to deliver on its Secure Enclave obligations and reaffirmed its commitment to delivering trusted and secure semiconductors to the US Department of Defense. The $8.9 billion investment is in addition to the $2.2 billion in CHIPS grants Intel has received to date, making for a total investment of $11.1 billion.
The announcement late Friday comes after President Trump said earlier in the day his administration would take a 10% stake in ailing chip giant Intel. Trump called it a "great deal." Intel's stock closed up 5.5% after the president's announcement.
Intel stock fell 1% in after-hours trading on Friday after details of the deal were confirmed.
"President Trump’s focus on U.S. chip manufacturing is driving historic investments in a vital industry that is integral to the country’s economic and national security," Intel CEO Lip-Bu Tan said in a statement. "We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership."
On Tuesday Treasury Secretary Scott Bessent told CNBC that the administration was exploring converting Intel's funding from the Biden-era CHIPS Act into equity aimed at stabilizing the company's US manufacturing business.
Intel is dealing with multiple issues across its businesses. Its manufacturing division is bleeding cash, just as its legacy computer chip segment forfeits market share to rivals Advanced Micro Devices (AMD) and Qualcomm (QCOM) in the PC space. Intel is also woefully behind AMD and Nvidia (NVDA) in the AI race.
The company's market capitalization of $111 billion is less than half of its value in 2021. And CEO Lip-Bu Tan has been forced to lay off 15% of the company's workforce and shelve plans to build plants in Europe.
But the troubled chipmaker is the only large-scale US-based leading-edge chip manufacturer, giving it geopolitical significance as the nation looks to reshore semiconductor production.
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