TLDR
- Tesla shares rose 1.5% to $417.32 Monday after bouncing 3.5% Friday, finding support at November’s $390 level
- Musk projects robotaxi fleet doubling monthly to cover up to half of U.S. by year-end despite past unfulfilled promises
- VP Raj Jegannathan departed after 13 years as Tesla pivots from luxury sedans to AI and robotics production
- Stock trades at 200x forward earnings with no expected free cash flow in 2026-2027 per Wall Street estimates
- Company ending Model S and X lines for Optimus robots while spending record $20 billion on infrastructure
Tesla shares gained 1.5% Monday, finishing at $417.32 as the stock appears to have found its footing. The move extends Friday’s 3.5% rally after a rough week.
Shares had dropped nearly 8% before Friday’s turnaround. Since fourth-quarter earnings on January 28, the stock has declined roughly 5%.
The $390 price level is proving crucial. Tesla shares hit this mark in November and appear to be using it as support again.
CEO Elon Musk outlined ambitious robotaxi expansion plans on the earnings call. Over 500 vehicles now carry paid passengers in Austin and San Francisco.
Robotaxi Growth Faces Reality Test
Musk said the fleet could double each month. He projected coverage across 25-50% of the United States by December, depending on regulatory approvals.
Independent data challenges these claims. Robotaxi Tracker found only four of 58 Austin vehicles operate without supervision, far below Musk’s statements.
History adds context. Musk promised 1 million robotaxis by 2020 back in 2019. He recently admitted on X that production would be “agonizingly slow.”
Safety concerns and regulations could slow expansion. Reports suggest crash rates among the fleet need improvement before agencies approve wider deployment.
Cybercab production doesn’t start until April. These two-seat vehicles without steering wheels are designed to scale the robotaxi business.
Tesla is shutting Model S and X production to free capacity for Optimus humanoid robots. The company committed $20 billion to capital spending in 2026, double last year’s investment.
Analysts Show Limited Enthusiasm
Wall Street sentiment remains lukewarm. Just 40% of analysts rate Tesla as Buy versus the 55% average for S&P 500 stocks.
Average price targets sit at $420, barely above current trading levels. That’s minimal movement given Tesla’s dramatic business transformation.
The valuation raises eyebrows. Shares trade at over 200 times forward earnings.
Some analysts don’t expect Tesla to generate free cash flow this year or next. The massive capex spending and uncertain robotaxi revenue timeline create financial pressure.
Leadership Change Adds Questions
Vice President Raj Jegannathan announced his departure Monday after 13 years with Tesla. He oversaw IT, AI infrastructure, business apps and information security.
Jegannathan previously led North American sales after Troy Jones left. Tesla’s 2025 revenue dropped 3%, marking its first annual decline.
The company faces mounting challenges. An aging vehicle lineup and negative reactions to Musk’s political engagement have hurt brand perception.
Consumer sentiment shifted as Musk took a role in the Trump administration and supported far-right political movements globally. Sales in key markets reflect this backlash.
SpaceX pivoted from Mars to moon missions for 2026, reversing Musk’s earlier position. Tesla holds a small SpaceX stake through xAI investments.
The $390 support level could enable further gains if it holds. Investors await catalysts like robotaxi launches in new cities or the third-generation Optimus robot reveal.
Shares closed at $417.32 Monday while the S&P 500 rose 0.5%. The stock needs a major positive development to break through resistance levels.
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