Tesla Shares Rise as Investors Stay Hopeful

Volatile Course of Tesla Shares

Tesla (TSLA) shares experienced a decline early on Friday, before starting to rise again with the market's recovery. However, with this movement, Tesla shares have lost approximately 9% of their value since the day CEO Elon Musk's $1 trillion compensation package was announced.

Despite a slight increase on Friday, Tesla shares closed the week down 5.9%, dropping well below the $400 support level and finishing at $404.35. The shares had fallen to their lowest levels since September.

The struggles in the markets stem from decreasing expectations for interest rate cuts in December and a decline in the valuations of major tech companies. Concerns about spending on artificial intelligence are also causing a shift towards less valuable sectors.

For investors, the future of artificial intelligence and autonomous technology stands out as a promising area for Tesla. Analyst Adam Jonas from Morgan Stanley, sharing his latest insights, provided "very early" forecasts for 2026. Jonas believes that Tesla will eliminate safety drivers in its Robotaxi tests and expand into other states. “2026 will be the year when robotaxis transition from science fiction to real life,” he said.

Musk announced at Tesla's recent investor meeting that safety drivers for Robotaxis in Austin will be removed by the end of the year. He also stated that Miami, Dallas, Phoenix, and Las Vegas are among the cities where Tesla will test its Robotaxi services.

Jonas also predicts that Tesla and Musk's artificial intelligence initiative xAI will soon come together. He mentioned that this situation will help Tesla enhance its Optimus robot production. “A Tesla robot factory is the ‘hub’ for the next generation of robots. I believe xAI's expanding computing and ‘quest for reality’ capabilities will become more apparent over time,” he says.

Tesla announced at the investor meeting that it will establish a production line for Optimus with a capacity of 1 million units at its factory in Fremont, California, and eventually open a line with a capacity of 10 million units at Giga Texas in Austin. Currently, Optimus is in the pilot production stage in Fremont.

Jonas rates Tesla as Overweight, while forecasting a short-term price target of $410, and a “bull case” scenario target of $800.

Recently, Dan Ives, an analyst at Wedbush, noted that the automaker's future in artificial intelligence is a crucial area for investors. “In my opinion, this will be the most important part of Tesla's story,” he said.

Ives emphasized that Musk's compensation package represents a “bright green light” for Tesla's artificial intelligence and autonomous technology plans, rating the stock as Outperform and expressing a highest price target of $600.