Al Root

Tesla stock snapped a painful five-day losing streak on Wednesday. Giving investors a chance to think about rewards instead of just the risks.

Shares of the electric-vehicle maker were up again in early trading Wednesday. The Wall Street Journal reported Thursday that Musk was prepared to drop his bid if OpenAI remained a nonprofit, citing court filings.

Musk's other activities outside of Tesla make investors in his car company nervous from time to time. Distraction is a risk, but so is financing. If Musk wins his OpenAI bid, it could mean billions in his Tesla stock sold to fund the deal.

Shares were up 3.2% in early trading on Thursday at $347.26 after Wednesday's 2.4% gain. The S&P 500 and Dow Jones Industrial Average were up about 0.2%.

"Tesla's stock has been under heavy pressure for a myriad of reasons in 2025 after a historic run post President [Trump's] win in November," wrote Wedbush analyst Dan Ives in a Wednesday evening report.

"Myriad" includes Musk's political activities at DOGE, his OpenAI bid, self-driving competition from BYD, weaker-than-expected fourth-quarter earnings, and even h0tter-than-expected monthly inflation data.

Higher inflation makes it less likely interest rates are coming down, and higher rates make buying a new Tesla, or any new car, more costly when buyers finance part of the purchase.

Ives still believes Musk's Washington relationship will yield benefits for the auto maker. "The deregulatory landscape in the Beltway will lay the groundwork for a federal autonomous road map which we believe unlocks a $1 trillion of valuation alone for Tesla over the coming years, " he wrote.

Ives rates Tesla stock at Buy with a $550 price target. That values Tesla at about $1.8 trillion. Morgan Stanley analyst Adam Jonas rates shares Buy, too. His price target is $430.

"Tesla is well positioned in the metamorphosis of U.S. manufacturing in the AI era," wrote Jonas in a Wednesday report. "Data is defining the software. Software is defining the hardware. Hardware is defining the manufacturing."

He views Tesla as a vertically integrated AI play. Tesla has millions of cars on the road, generating data, which can develop the software to make cars drive themselves. It also has the manufacturing expertise to build the cars.

To be sure, those are two bulls are convinced Tesla is far more than a car company. Their target prices for Tesla stock average $490, while the average analyst price target is about $381, according to FactSet.

Coming into Thursday trading, Tesla stock is down about 17% so far this year. Almost all of that drop came during the five-day losing streak that ended on Wednesday.

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

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February 13, 2025 09:49 ET (14:49 GMT)

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