Why Tesla share jump 11% despite drop in production 

Revenue fell by 9%, significantly affected by a 13% drop in sales from the automotive segment—a clear indicator of increased competition. Additionally, gross margins contracted by 18%, likely due to price reductions.

There could be some reason :-

Firstly, as previously mentioned, some investors might perceive the "Mag 7" stock as excessively beaten down and view it as a viable candidate for a rebound. Since poor results were anticipated, Tesla faced a relatively low threshold for performance. As long as the results were deemed acceptable by investors, they had a rationale to buy the stock.

Regarding the issue of a quarter with negative free cash flow (FCF), it's important to note that Tesla still has a substantial cash reserve of $27 billion. If this amount were invested in treasury bills with a 5% yield, it could generate over $1 billion in interest income. This potential revenue could effectively double its profits for the fourth quarter of 2024.

Some investors are beginning to wonder if there's an opportunity, especially when a "Magnificent 7" stock is so heavily beaten down—could the reaction be overblown?

It is no secret that Tesla, both as a business and in its stock performance, has not met expectations. Reports of Tesla cutting prices, production challenges with the Cybertruck, and the absence of a new model to succeed the aging Model 3 have surfaced repeatedly. Consequently, its stock price has fallen 42% year-to-date, making it the worst performer among the S&P 500 index stocks.

Neverless Tesla's 1Q24 financial results have been underwhelming, revealing the impact of competition and price cuts on its performance.