Tesla shares are currently trading near their yearly lows as the market shifts its attention away from the company's electric vehicle roots and focuses more on its high-octane future: robotaxis, artificial intelligence (AI), and an ambitious pipeline of new ventures.
Last week brought a much-needed spark. News of Tesla's $16.8 billion chip manufacturing project, i.e., the Terafab initiative, gave the stock a jolt of optimism. For a moment, it looked like the narrative was turning. If executed well, this move could be a masterstroke, reinforcing the firm's technological independence and adding serious momentum to its self-driving aspirations.
However, the automotive side of the business is still a pressure point. Since the second‑quarter earnings landed, investors have kept a close watch on vehicle sales, profit margins, and the eye‑watering capital expenditure bill. The dilemma is clear: Tesla is pivoting away from cars toward AI and autonomous vehicles, but with this pivot come soaring expectations and little room for error. And this is a precarious position for any share.
China adds another layer of complexity. Intense competition from domestic EV manufacturers and the looming threat of regulatory obstacles could squeeze sales in one of Tesla's most vital markets. At the same time, the stock's lofty valuation suggests that traders have already baked in a significant dose of future success. So, the bar is set sky-high. As a result, even minor delays in the robotaxi rollout, autonomous driving, or AI infrastructure may prompt a sudden wave of profit-taking.
The final recommendation:
— Sell Tesla shares at the current price ($328), aiming to reach $297 within two weeks.
— To keep risk in check if the market moves against us, place a Stop Loss order at $340.
This content is for informational purposes only and is not intended to be investing advice.
