Tesla Stock Reacts to New AI Chip Deal
Tesla (TSLA) stock shot up today as the company announced a deal with Samsung worth billions of dollars.
Quick overview
- Tesla stock surged 3.89% on Monday following a $16.5 billion deal with Samsung for AI chips.
- The company is also set to receive AI5 chips from Taiwan Semiconductor Manufacturing.
- Despite the recent stock increase, Tesla has lost about 20% of its value in 2025 and faces challenges including a damaged public image and stiff competition.
- Investors are cautioned that while Tesla has long-term potential, short-term gains may be limited.
After floundering in a downward spiral for weeks, Tesla (TSLA) stock is climbing dramatically Monday after a deal was announced between the automaker and Samsung.
Samsung will be making an AI chip for Tesla’s vehicles, announced Tesla CEO Elon Musk on X. These are AI4 chips to be produced in a new facility that will be built in Texas, and the deal is estimated to be valued at $16.5 billion.
Tesla will also receive chips made by Taiwan Semiconductor Manufacturing- the AI5 chip. As a result of the news, Tesla stock started to climb rapidly Monday morning and has already increased by 3.89%.
Now valued at $328.56 per share, Tesla stock is higher than it has been all month and is on par with its June peak. Monday’s jump marks the sharpest and most significant single day gain in weeks for the electric automaker.
Should Investors Buy In on Tesla Now?
If investors missed buying Tesla stock before Monday’s jump, they will likely be in a poor position to earn a profit in the short term if they start to buy at this point. Tesla could perform well over the long term, and it has come out of slumps before, but there are a number of factors working against it in the short term.
Tesla is still down overall, having lost roughly 20% of its stock value in 2025 so far. The company has a long way to go to gain back that ground, and it will have to fight against public perceptions that it is a failing company with an out-of-control CEO. The company’s public image has taken a massive blow this year, with Musk being associated with extreme right groups in Germany and the United States. That has led to sharply declining sales throughout the world and specifically in the European Union.
Tesla is also suffering from not having a new product to release, although that could be changing soon. They are facing stiff competition from other electric car makers, and electric car sales are still climbing around the world. It is simply Tesla that is falling behind.
The company launched their auto-taxi service in Texas last month, and that endeavor has had mixed results. It was not the company move that saved the business and skyrocketed Tesla stock like many investors had hoped it would be, but then again, the robotaxi service has only had a soft rollout so far.
Tesla obviously has big plans for the future to make a multibillion dollar investment into AI chips. This could be just what it needs to make its automatic driving vehicle features work better or to power the Optimus humanoid robots that the company has been working on. The hope that Tesla will do something incredible with this in the long term has been enough to boost the stock price, but we expect the value to come back down in the short term.
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