Tesla Stock down 1.25% Despite Robotaxi Service Expansion
Tesla stock continues to fall as investors fear that AI companies will fail soon and the market bubble will burst.
Quick overview
- Tesla is expanding its robotaxi service in Austin to all iPhone users, but the company's stock fell 1.25% on Tuesday.
- Despite a recent upgrade in price target by Stifel, Tesla's stock is down to $402.67, reflecting a bearish sentiment in the tech market.
- The company faces challenges with declining sales and increased competition, particularly in European markets and on the West Coast.
- To regain investor confidence, Tesla must deliver strong data, successful product launches, and improved sales figures amidst concerns about the AI market.
Tesla (TSLA) is planning to open up its robotaxi service in Austin to anyone with an iPhone, but that was not enough to keep the company’s stock from dropping 1.25% on Tuesday.
Tesla’s robotaxi is open to customers throughout Texas and California now, with more service areas being added soon. In Austin, the service was only available to those who were invited to be a part of the launch, but now anyone who has an iPhone can access it. Despite the news, the company’s stock is falling this week, now down to $402.67.
The stock price is now back to where it was two months ago, peaking at $468 per share in early November. The stock briefly surged this week when investment banking company Stifel upgraded its price target for Tesla to $508 from $483.
Why Is Tesla Stock Falling Today?
The electric car manufacturer has had a difficult year and was expected to perform better once its CEO Elon Musk left government service to come back full time in a management position at Tesla. His return did boost the company’s stock for a short while, but then he almost immediately requested a $1 trillion pay package. There was some debate over that issue, but the package was approved last week, and the company was expected to be able to move forward at full steam from there.
Traders are now bearish on Tesla stock after the most recent downturn, and the company will have to work hard to win back shareholders and investors. Shares are down nearly $4 for Tuesday, and the company has had a rough year in sales. Tesla has been losing in monthly sales to much of its competition in European markets and on the West coast of the United States in particular.
It is smart of the company to pivot to robotaxi services where they have less competition and to invest in AI concepts like the Optimus robot which is in early production. However, faith in AI as a market is waning, with the stock market taking a hit over the last couple weeks as investors pull away from AI-related stocks. Even impressive quarterly reports from leading AI companies has not been enough to keep stock numbers elevated, and Tesla is a casualty of this ongoing fear that the AI market bubble will burst soon.
Tesla is going to have to fight those fears with hard data, impressive product rollouts, and improved sales figures if they want their stock value to improve. We expect a few more hard weeks for Tesla and AI and tech stocks at least as analysts continue to post alarming statistics about the AI market and make doomsday predictions about its future.
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