What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) fell 2.6% in the afternoon session after major indices pulled back from record highs reached the previous week.
The S&P 500 and Nasdaq were under pressure as the dominant artificial intelligence trade cooled off. Notable names like Nvidia were down as traders locked in profits following a banner year where the Nasdaq surged over 20%. With the S&P 500 recently hitting intraday highs near 6,945, this dip reflected a shift in internal momentum rather than a response to major economic news.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Tesla? Access our full analysis report here.
What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 40 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 7 days ago when the stock gained 2.8% on the news that a Delaware Supreme Court ruling restored CEO Elon Musk's 2018 compensation plan, ending a long-running legal battle.
The court reversed a lower court's decision to cancel the $56 billion pay package. This news removed a significant legal uncertainty that had loomed over the company. Adding to the positive sentiment, the company reportedly began testing fully driverless vehicles in Austin, Texas, without safety drivers, marking a major step toward commercial autonomous driving. Investor focus also turned to Tesla's 2026 product plans, which included a sub-$25,000 model and the first commercial use of its Cybercab. Further bolstering confidence, Deutsche Bank and RBC both raised their price targets on the stock.
Tesla is up 22.3% since the beginning of the year, and at $463.89 per share, it is trading close to its 52-week high of $489.88 from December 2025. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $2,090.
While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report.
