Tesla’s stock continues its impressive recovery trajectory, climbing 0.51% during Tuesday’s trading session to test an intraday high of $354.99, its highest level in three months. The electric vehicle maker’s shares (NASDAQ: TSLA) ultimately closed at $343.82, marking a remarkable 60% gain from April’s lows.
This resurgence comes as investors digest Elon Musk’s latest revelations about Tesla’s AI strategy and its relationship with semiconductor powerhouses.
Tesla Stock Price Tests 3-Month Highs
Tuesday’s test of the $354.99 level pushed Tesla back to its highest price in three months, with growing optimism now surrounding the company.
Tesla’s stock has rebounded more than 60% from the lows seen last month and in March, significantly increasing its chances of returning to the area of the all-time highs last tested in December near the $475 mark.
But why is Tesla’s stock rising? Let’s take a closer look.
Why Is Tesla Stock Up Today? AI Developments
During a wide-ranging interview with CNBC’s David Faber on Tuesday, Elon Musk outlined ambitious plans for his AI ventures that appear to be catalyzing Tesla’s stock performance. The Tesla CEO confirmed that both Tesla and his AI company xAI will continue purchasing chips from industry leaders Nvidia and AMD, potentially alleviating concerns about supply chain disruptions.
“A few years ago, I made a very obvious prediction, which is that the limitation on AI will be chips,” Musk stated during the interview. This acknowledgment of continued partnerships with established chip manufacturers provides stability to Tesla’s AI roadmap, which has become increasingly central to the company’s valuation narrative.
Musk revealed that xAI has already installed 200,000 GPUs at its Colossus facility in Memphis, Tennessee, making it what he described as “the most powerful training cluster in the world right now.” Even more ambitious is the company’s plan to build a 1 million GPU facility outside Memphis, signaling the scale of Musk’s AI aspirations.
The Tesla-xAI Relationship: Potential Synergies
While Musk indicated there are no immediate plans to merge Tesla and xAI, he notably didn’t rule out the possibility, stating it’s “not out of the question” and would “obviously require Tesla shareholders support.” This openness to potential integration has sparked speculation among retail investors about future synergies between the companies.
The relationship between Tesla and xAI is already substantial. Tesla recently disclosed in a financial filing that xAI spent approximately $191 million in 2024 and an additional $36.8 million through February 2025 on Tesla Megapacks, the company’s utility-scale energy storage systems. This cross-pollination between Musk’s ventures creates a compelling narrative for investors who see value in the “Muskonomy” ecosystem.
Global Competition: U.S. vs. China
Musk’s comments on the global AI race add another dimension to Tesla’s investment thesis. He noted that China’s investments in power generation currently exceed those by the United States, though he believes the U.S. maintains an “advantage in breakthrough innovation.”
“I think it’s somewhat of a cultural thing, which is that to have breakthrough innovation you have to question authority,” Musk observed. “Fundamentally, you’re questioning the conventional wisdom when you do a breakthrough innovation.” This perspective suggests that despite infrastructure challenges, Tesla and other U.S. companies may maintain a creative edge in AI development.
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Tesla Shares Technical Analysis
The stock’s technical picture has also improved significantly, with the formation of a “golden cross,” where the 50-day exponential moving average crosses above the 200-day exponential moving average. This technical pattern is widely regarded as a strong bullish signal that could attract additional buying interest in the coming weeks.
According to my technical analysis, the resistance at the $325 level in May has turned into support. The price is currently being capped by the 50% Fibonacci retracement level, drawn from the downtrend that began in December 2024 and continued through March of this year. A breakout above this level would confirm that bullish momentum is returning to Tesla’s chart, with the next targets likely around $380—corresponding to the early 2025 lows—and the 61.8% Fibonacci retracement level. Beyond that, the price could move toward the $400+ range.
The recently formed golden cross on the daily chart certainly reinforces this outlook. The last time such a crossover occurred was in July of last year. Back then, the price initially pulled back slightly but soon began a strong upward rally, eventually doubling in value within six months of the signal. Will history repeat itself? As always, time will tell.
How High Can Tesla Go? Cathie Wood Predicts 800% Jump
In my recent article on Tesla from nearly two weeks ago, I highlighted Cathie Wood’s ultra-bullish forecast from ARK Invest, which projects that Tesla shares could surge by 800%, reaching $2,600. You’ll also find more reasons there why Tesla’s stock may be rising at this time.
However, not everyone shares this optimism. While Morgan Stanley has a price target of $410 per Tesla share, other banks suggest the stock should be trading below its current level.
| Analyst/Institution | Price Target | Timeframe | Rating/Stance | Key Thesis |
|---|---|---|---|---|
| Cathie Wood (ARK Invest) | $2,600 | 5 years (2030) | Bullish | 90% of value from robotaxis; expects cheaper $30K EV model |
| Morgan Stanley (Adam Jonas) | $410 | 12 months | Overweight | Robotics and “Embodied AI” as key growth drivers |
| Goldman Sachs | $235 | 12 months | Neutral | Concerns about tariff impacts on volumes |
| Barclays | $275 | 12 months | Equalweight | Weak fundamentals and challenges in volume growth |
| 24/7 Wall Street | $352.99 | 12 months | Bullish | Revenue growth from $112B (2025) to $297B (2030) |
What This Means for Tesla Retail Investors
Tesla’s stock resurgence reflects an evolving investment narrative that increasingly emphasizes the company’s position at the nexus of transportation, energy, and artificial intelligence. While the electric vehicle business remains central to Tesla’s identity, Musk’s latest revelations highlight how the company’s future may be equally tied to developments in AI infrastructure and energy solutions.
For retail traders watching Tesla’s stock, several key factors emerge from these developments:
Tesla represents more than just an automaker, it’s a bet on Musk’s integrated vision across multiple industries. As the stock continues testing new highs, the market appears to be rewarding this expansive vision, particularly as traditional valuation metrics for the automotive sector become less relevant to Tesla’s hybrid business model.
Tesla News, FAQ Section
What is driving Tesla’s stock price up today?
Tesla’s stock is rising due to Elon Musk’s revelations about continued partnerships with chip makers Nvidia and AMD, ambitious AI infrastructure plans, and potential synergies between Tesla and xAI. Technical factors like the formation of a golden cross are also contributing to positive momentum.
How much has Tesla stock gained since its recent lows?
Tesla stock has gained over 60% since its April lows, with shares recently testing a three-month high of $354.99.
Will Tesla and xAI merge in the future?
While Elon Musk stated there are no immediate plans to merge Tesla and xAI, he noted it’s “not out of the question” and would require Tesla shareholder approval. The companies already have business relationships, with xAI purchasing Tesla Megapacks for its operations.
What are the main challenges for Tesla’s AI ambitions?
According to Musk, the main challenges include chip supply constraints, electrical equipment limitations, and an impending electricity generation shortage that could impact AI development as early as mid-2026. Environmental concerns and regulatory hurdles around power-intensive AI facilities also present challenges.
What is a “golden cross” and why is it significant for Tesla stock?
A golden cross occurs when a shorter-term moving average (the 50-day EMA) crosses above a longer-term moving average (the 200-day EMA). This technical pattern is widely regarded as a bullish signal that could attract additional buying interest from technical traders and momentum investors.