Tesla stock is suddenly on fire, and it's not clear why.
Shares of the electric-vehicle maker were up 7.6% on Wednesday at $391.95. Shares had their best day since June 2025.
The gain comes as TD Cowen analyst Itay Michaeli lowered his price target to $490 from $519. He kept his Buy rating on the shares. A target cut shouldn't drive big gains.
CEO Elon Musk appears to be one of the reasons for the stock's jump. Tesla has a large and devoted retail shareholder base that is active on his social-media platform, so investors can always head to X to see what's going on. Early Wednesday, Musk tweeted a picture of a Tesla-designed microchip, dubbed AI5.
The chip is for "Optimus and our supercomputer clusters," said Musk in a subsequent tweet. "AI4 [hardware] is enough to achieve much better than human safety for FSD."
FSD is short for Full Self-Driving, Tesla's driver assistance product that forms the basis of its robo-taxi technology.
That gentle nudge from Musk was all the stock seemed to need.
The market could be helping, too. Several growth stocks are making big moves, with traders potentially looking forward to the end of the Iran war, says Future Fund co-founder Gary Black. Uber, Shopify, and DoorDash shares were up roughly 6%, 7%, and 8%, respectively.
A third reason comes from the Securities and Exchange Commission. The SEC plans to ease restrictions on day trading, a policy change that will favor retail investors with small balances. Robinhood stock was up almost 9% in midday trading. Tesla stock has always been popular with retail traders, who hold roughly 50% of shares available for trading, according to Bloomberg, about twice as much as other large tech stocks.
The starting point could also be fueling the strength of the rebound. Coming into the week, Tesla stock has been mired in a terrible slump, dropping for eight consecutive weeks and losing 16% over that span.
Investors will be looking for more details about chips, robots, and robo-taxis when Tesla reports first-quarter earnings on April 22.
