EVs | Barron's Take | Tesla Stock Is Surging. Why Shares Are Set for a 3-Week Winning Streak.

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2. Barron's Take

Tesla Stock Is Surging. Why Shares Are Set for a 3-Week Winning Streak.

By Al Root

Updated May 09, 2025, 12:47 pm EDT / Original May 09, 2025, 4:38 am EDT 

TSLA stock rose in early trading Friday. It’s going for three weekly gains in a row.

Shares of the electric-vehicle maker were up 4.5% at $ 297.77, while the S&P 500 

SPX

-0.10%

 and Dow Jones Industrial Average 

DJIA

-0.34%

 were down 0.2% and 0.4%, respectively.

It’s a lot to pin gains on. Trade talks could be helping. Shares gained 3.1% on Thursday, partly helped by President Donald Trump’s trade deal with the U.K. It lowers import tariffs for Tesla shipping Model S and X vehicles from the U.S., but it also signals that trade deals are possible. “Optimism around the China tariff and trade tensions scaling down is a boost for Tesla,” Wedbush analyst Dan Ives said in an email.

Another thing that might be helping is an essay about Tesla’s robotaxi development by a former Tesla engineer that is circulating among investors.

Frank Yashar starts his essay by comparing SpaceX to the traditional satellite industry. SpaceX now has more than 7,000 low-cost satellites orbiting the Earth, providing high-speed Wi-Fi service to millions. The traditional industry didn’t have the cost structure or launch capacity to consider a satellite constellation that size, but SpaceX did it.

Robotaxis are operating right now. Alphabet’s GOOGL -1.10% Waymo completes more than 250,000 self-driving taxi rides a week. He believes, however, that Tesla’s Robotaxi business will cost less, giving it the chance to replicate the SpaceX success.

It’s a very bullish take, and one shared by bullish Wall Street analysts, but the essay is new and something for investors to consider. Yashar didn’t immediately respond to a request for comment.

These days, robotaxis take up the most space in Tesla shareholders’ heads. Tesla shares rose 18.1% the week Tesla reported first-quarter earnings —on April 22. Numbers were weaker than expected, but the EV maker stuck to its robotaxi development timeline. It’s still planning to launch a robotaxi service in June. What’s more, CEO Elon Musk said on the earnings conference call he would spend less time in Washington and more time at Tesla.

Investors have worried for weeks that Musk’s political activities were impacting sales. Tesla sold about 337,ooo cars in the first quarter, down 13% year over year and about 40,000 fewer than Wall Street expected.

Sales data from the U.S., Europe, and China in April hasn’t shown a sales rebound yet, but Tesla stock hasn’t done all that much since earnings week. Shares gained 0.8% the week after earnings.

Investors are waiting for robotaxis. That’s likely the thing that will move the stock most in the second quarter. Robotaxi success would likely send shares higher. Disappointment will have things move in the opposite direction.

Coming into Friday trading, shares were down 0.8% for the week. A decent Friday gain can make it three weekly gains in a row.

Write to Al Root at allen.root@dowjones.com

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