Tesla (TSLA) Stock: Why Investors Ignored Wednesday’s AI Panic and Bought the Dip

TLDR

• Tesla stock jumped 1.4% Thursday morning to $473.65 after dropping 4.6% during Wednesday’s AI sector selloff
• Shares reached an all-time high of $495.28 on Tuesday before the Wednesday retreat
• AI chip startup Mythic raised $125 million, sparking fears across the AI sector that sent stocks lower
• Tesla has started testing driverless cars in Austin as part of its robotaxi rollout plans
• Stock is up 16% year to date as investors bet on autonomous driving over traditional EV sales

Tesla stock recovered Thursday morning following a messy Wednesday selloff. Shares climbed 1.4% to $473.65 in early trading.

Tesla, Inc., TSLA

The rebound came quickly. Just a day earlier, Tesla had dropped 4.6% as AI stocks tumbled across the board.

That Wednesday decline happened right after Tesla’s best moment of the year. Shares hit $495.28 earlier in the day, setting a new record.

The selloff wasn’t about Tesla specifically. The entire AI sector got hammered after Mythic raised $125 million for energy-efficient AI chips.

Nvidia dropped 3.8%. GE Vernova crashed 10.5%. Investors hit the panic button without asking questions.

Here’s the irony: lower energy consumption from AI chips would actually help Tesla. The company uses tons of AI computing for self-driving tech and robotics.

But market logic doesn’t always make sense. When AI stocks fall, they tend to fall together.

From Disaster to Record High

Tuesday’s record close capped an impressive comeback story. Tesla stock had crashed more than 50% by mid-April from its December 2024 peak.

The collapse came as Elon Musk got deep into government work with the Trump administration. Customers pushed back. Investors worried Musk wasn’t focused on Tesla.

The stock turned around when Musk stepped away from Washington. Shares have been climbing since.

The big driver? Tesla’s pivot to AI and autonomous vehicles.

Musk announced this week that Tesla started testing empty self-driving cars in Austin. No safety drivers. Just the car and the software.

That’s a huge step toward the robotaxi service. Tesla launched a pilot program in Austin in June and expanded to San Francisco in July.

Wall Street Split on What Comes Next

Wedbush analyst Dan Ives thinks Tesla could hit $800 by the end of 2026. That’s more than 60% upside from current levels.

He expects Cybercab production to start by May. Federal regulators should help speed up the robotaxi rollout, he says.

Most analysts aren’t buying it. The average Wall Street price target sits below $400.

The autonomous vehicle hype has covered up weak EV sales. Deliveries dropped hard in the first and second quarters.

Last quarter saw a record as buyers rushed to claim expiring tax credits. But Tesla will still deliver fewer cars in 2025 than 2024.

Shareholders approved a compensation package for Musk last month worth up to $1 trillion. That calmed fears about his commitment to the company.

He promised fully autonomous Teslas would be operating in Texas and California by year-end. Plans call for expanding to Phoenix and Las Vegas in 2026.

Despite Wednesday’s drop, Tesla stock is up 16% for the year. The quick Thursday recovery shows investors still believe in the autonomous future Musk is selling.

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