Tesla's Stock Value Drops as Robotaxi Hopes Wane

Tesla (TSLA) shares closed the week with a decline on Friday. Hopes for robotaxis were unable to overcome the artificial intelligence concerns that have impacted the market. Sharp sell-offs on Thursday negatively affected Tesla as well as other tech stocks in the 'Magnificent Seven.' Particularly, this trend did not change even after a strong earnings report from Nvidia (NVDA).

On Thursday, Tesla shares fell by more than 2%, and on Friday, they lost nearly 3% in value. Recent doubts about artificial intelligence have increased due to the more than $1 trillion investments made by tech giants in firms like Nvidia and OpenAI (OPAI.PVT).

Tesla has become a robotic investment vehicle outside the automotive sector by making significant artificial intelligence investments in areas such as data centers, chipsets, and Full Self-Driving (FSD) software products. This situation could lead to a deepening of stock sell-offs.

However, there are also positive developments for Tesla. According to a report by Business Insider on Friday, Tesla has completed its certification process for robotaxi operations, according to a source from the Nevada Department of Motor Vehicles (DMV). This means that Tesla can operate robotaxis on the road, but it needs to obtain approval from the Nevada Transportation Authority to commercially use these vehicles.

This week, according to a spokesperson from the Arizona Department of Transportation (ADOT), Tesla has completed the final step to launch its robotaxi service in the state. However, Tesla’s Arizona robotaxi service will still include a safety driver; this is similar to the company's application in Austin, Texas, and the San Francisco Bay Area.

Tesla has expanded its service in Austin and the Bay Area over the past few months. Rivals like Waymo operate in various service areas across the United States, but Waymo does not need to include safety drivers since its service has already reached Level 4.

For Tesla, which has not yet reached Level 4, hopes for robotaxis have prompted Wall Street analysts to take action. Recently, Stephen Gengaro from Stifel raised Tesla's price target from $483 to $508 and maintained an 'Buy' rating. Gengaro noted that Tesla's management plans to expand into eight to ten major cities by the end of 2025.

As a result of Gengaro’s positive report on Friday, shares gained 3% in value. However, over the weekend, the shares saw a 5% decline.