What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) jumped 3.7% in the morning session after Morgan Stanley upgraded its rating on the stock to 'overweight' from a previous dropped coverage and set a price target of $410. The upgrade was part of a wave of positive developments for the electric vehicle maker. CEO Elon Musk also announced that the company is testing a new Full Self-Driving (FSD) model with significant improvements, which could be released by the end of September.
After the initial pop the shares cooled down to $330.92, up 2.7% from previous close.
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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 4 days ago when the stock gained 3.1% on the news that 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.
Tesla is down 12.8% since the beginning of the year, and at $330.92 per share, it is trading 31% 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 $3,499.
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