Tesla did it. The company launched its long-awaited robo-taxi service in Austin, Texas, on Sunday.
"Super congratulations to the Tesla AI software and chip design teams on a successful robotaxi launch!!" tweeted CEO Elon Musk on Sunday. "Both the AI chip and software teams were built from scratch within Tesla."
Tesla shares jumped 9.3% to $352.11 in morning trading.
The early move is up, but how Tesla stock will trade on Monday and in the coming days is tough to say. The stock market is forward-looking, and sometimes shares rise in anticipation of something, and fall when that something arrives.
The launch was relatively meager, with only a handful of Teslas involved, in a geofenced area of Austin, with users handpicked by Tesla, and a safety monitor in the front passenger seat.
"It was a relatively uneventful Sunday in Austin, and uneventful is a good outcome for Tesla's launch of commercial robotaxi operations [with] about 20 influencers in a geofenced part of Austin (about 10 square miles)," wrote Guggenheim analyst Ronald Jewsikow in a Monday report. "Based on our analysis of publicly available videos from the influencer community, the day was filled with almost entirely clean driving performance." Jewsikow rates Tesla stock at Sell -- a valuation call -- with a $175 price target. (Tesla stock trades for almost 170 times estimated 2025 earnings, according to FactSet.)
The level of anticipation for Tesla's robo-taxi launch couldn't have been much higher. Bullish analysts and investors believe artificial-intelligence-trained autonomous driving technology is worth trillions of dollars. And coming into Monday trading, Tesla stock was up 35% since the company's Oct. 10 robo-taxi event when it laid out plans to start a self-driving cab service in 2025.
Still, investors knew all those details. They are not a surprise. UBS analyst Joseph Spak wrote Monday that the robo-taxi opportunity was already priced into shares. He took his price target on Tesla stock to $215 from $190. But Spak kept his Sell rating based on valuation
Other challenges remain. Texas recently passed a law requiring self-driving cars to have a permit. The law is effective on Sept. 1. Navigating state regulations is another thing for Tesla to manage. So is competition. Alphabet's Waymo recently applied for a self-driving taxi permit in New York City. Waymo completes more than 250,000 driverless rides a week in several cities, including San Francisco and Tesla's hometown of Austin.
The launch did happen, though. Tesla has now taken money for an autonomous taxi ride. Few companies can say they have achieved that technological and business milestone.
Fairlead Strategies founder and market technician Katie Stockton recently told Barron's that Tesla stock has a lot of support around $300. That's the lever to where it might drop on a sell-the-news reaction. On the other hand, shares have some resistance from $370 to $380. That's the initial upside if the reaction is positive.
Stockton isn't making a fundamental call on Tesla stock. She's looking at stock charts and market history to understand changes in investor sentiment, and where the stock can go over the short and medium term.