What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) jumped 5.9% in the morning session after CEO Elon Musk purchased approximately $1 billion of the company's stock, a move viewed by investors as a significant vote of confidence.
According to regulatory filings, Musk acquired roughly 2.57 million shares in open-market transactions the previous Friday. This represents his first open-market purchase of Tesla stock since February 2020 and his largest ever by value. The disclosure sent shares surging as investors reacted positively to the news. Dan Ives of Wedbush noted that the move "is a huge sign of confidence for Tesla bulls and shows Musk is doubling down on his Tesla A.I. bet."
Adding to the positive sentiment, Barclays raised its third-quarter delivery forecast for Tesla to 465,000 vehicles, well above the consensus estimate of 430,000 units. The company also reportedly plans to accelerate production at its Berlin factory to meet strong European demand.
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What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 47 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 3 days ago when the stock gained 5.9% on the news that the stock extended its positive momentum on a wave of positive news including growing optimism around its autonomous driving technology.
Investor optimism was bolstered by advancements in its Full Self-Driving (FSD) technology and the expansion of its robotaxi ambitions, highlighted by official approval from the Nevada DMV to start testing autonomous vehicles on public roads.
Additionally, the company launched its new Megapack 3 and Megablock energy storage systems, which promise to reduce installation times and costs. The rally was also supported by broader market strength, as Wall Street indexes reached record highs amid expectations of a Federal Reserve interest rate cut.
Tesla is up 11.1% since the beginning of the year, but at $421.45 per share, it is still trading 12.2% 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 $2,811.
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