Tesla Opens Up Over 2%, Shares Return to $400, Here Is What Investors Need to Note

TradingKey - During the U.S. stock market opening on May 7, Tesla (TSLA.US) The stock price continued its rebound momentum, rising over 2% at one point to open at $406, reclaiming the $400 level. On May 5 and 6, the stock touched the $400 mark intraday but closed below that level on both days.

Since its share price bottomed out at approximately $350 in mid-April, Tesla has rallied about 16%. Investors are now focused on identifying the catalyst for this latest rebound in Tesla shares.

What factors are driving Tesla's rebound?

Since April, as geopolitical risks from the US-Iran conflict gradually eased, high-beta technology companies on the Nasdaq led a V-shaped reversal in stock prices driven by risk appetite, resulting in a collective rebound for the tech sector.

However, the fundamental support logic for Tesla is being marginalized by the market. The narrative supporting Tesla's stock price is increasingly dependent on the future. In the first quarter of 2026, Tesla delivered 358,023 vehicles, a year-on-year increase of only 6%, falling short of market expectations. Yet, this sales data—widely interpreted as "weak" by Wall Street—not only failed to drag down the stock but instead pushed it approximately 4.5% higher on the first trading day after the earnings report.

This once again signals to the market that the pricing logic for Tesla has undergone a fundamental shift.

Previously, Tesla launched its unsupervised Robotaxi ride-hailing service in Dallas and Houston, with the fleet size in Texas reaching 25 vehicles. Musk admitted that large-scale deployment must wait for the release of FSD V15, yet the market has accorded a significant premium to this breakthrough.

In addition, the Optimus humanoid robot is expected to be released mid-year, though no commercial orders or application scenarios have been officially confirmed. Regarding AI computing and chips, the collaboration between the Terafab project and Intel's 14A process has opened up new possibilities for "chip self-sufficiency," but the factory is still in the early stages of construction and is at least two to three years away from mass production.

None of these three "future stories" provide a verifiable path to commercialization, yet they have once again injected new momentum into Tesla's stock price.

Star Investor Cathie Wood Continues to Bet on Tesla

Against a backdrop of weak fundamentals and significant valuation bubbles, Wall Street "tech bull" Cathie Wood is increasingly "buying the dip" on Tesla.

In early April, Cathie Wood's ARK Invest continued to increase its position in Tesla during a panic-driven decline in the stock price, purchasing a total of nearly $27.8 million within a single week. Tesla remains the largest single holding in the ARK Innovation ETF (ARKK), with a total weighting of approximately 8.49%.

Notably, in its valuation model updated at the beginning of 2026, ARK raised Tesla's 2026 price target to $4,600 per share (a sharp increase from the previous $3,000 target). The core logic is singular: Tesla is no longer just an automobile company, but a robotaxi platform. According to model estimates, the robotaxi business will contribute approximately 60% of Tesla's expected value and more than half of its EBITDA.

Cathie Wood's betting strategy is starkly different from most Wall Street funds. Her capital scale is sufficient to navigate short-term volatility, as she bets on whether Tesla can transform from "selling hardware" to a platform-based tech giant "selling miles" by 2030.

However, this logic requires the market to maintain a high degree of consensus on the Robotaxi rollout timeline. Should FSD V15 face further delays, or if the expansion of the Robotaxi fleet lags significantly behind competitor Waymo, the $4,600 price target model will face systemic risks of marginal devaluation.

What should investors watch after Tesla’s stock price stabilizes above $400?

Tesla's current P/E ratio has exceeded 360x, far higher than the normal valuations of traditional automakers. The divergence between longs and shorts regarding the speed at which Tesla shapes the AI era has reached a fever pitch.

Investors should focus on the fact that the number of cities where robotaxis are officially operating for a fee is the primary indicator for verifying commercialization progress; currently, Tesla only provides "unsupervised" services in the three Texas cities of Austin, Dallas, and Houston, but the actual operating fleet size remains extremely limited and is far from achieving a pervasive effect.

Furthermore, the progress of FSD approval in Europe is also a key variable. Musk stated the EU is "expected to approve soon." Although Dutch regulators granted approval in April, regulators from the four Nordic countries have jointly raised extensive questions regarding the system's reliability on icy and snowy roads and potential speeding behavior, meaning the timeline for FSD's full rollout across Europe remains unclear.

Previously, Morgan Stanley analyst Andrew Percoco explicitly identified 10 billion cumulative driving miles as a key core milestone in the field of autonomous driving, estimating the company will hit this data node within 6 to 9 months. If Tesla can accelerate its arrival at this milestone and demonstrate reliability and safety in unsupervised driving, it will directly clear data-level obstacles for FSD's commercialization.