By Al Root
Tesla stock was down in early trading on Thursday. Robo-taxi progress couldn't overcome Broadcom's results.
Shares of the electric-vehicle maker were down 0.9%, while S&P 500 futures were down 0.4%.
Many tech stocks were down early. Nvidia shares were off 0.8%. Intel shares were down 3.8%. Broadcom's fiscal second-quarter earnings report catalyzed the decline. Its shares were down 13% in premarket trading.
The AI chip designer reported better-than-expected earnings. Guidance for fiscal third-quarter revenue was about $29.4 billion, up about 84% year-over-year. Analysts were projecting $28.3 billion.
All that looks fine. Still, investors wanted more. Broadcom only reiterated guidance that fiscal year 2027 AI revenue would be "in excess of $100 billion." That needed to go up for the stock to keep working, according to Melius analyst Ben Reitzes.
What Tesla has to do with Broadcom is a good question, and easy to answer. Both are all about AI these days. If one AI company stubs its toe, investors can expect other AI companies to say "ow."
Tesla investors did get some good AI news of its own recently. Barclays analyst Dan Levy wrote Wednesday that Tesla had removed the safety monitors in robo-taxis operating in a geo-fenced area of Austin. That's progress.
Tesla launched its AI-trained robo-taxi service in Austin, Texas, about a year ago. Expansion has been slower than expected. A handful of robo-taxis are operating in four cities. Levy estimates the fleet at only 40 to 50 cars.
Investors hope that self-driving cabs will unlock a new era of earnings growth for Tesla. That will require many more robo-taxis in many more cities.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
June 04, 2026 07:16 ET (11:16 GMT)
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