Why Tesla Stock Jumped Tuesday

Tesla (NASDAQ: TSLA) shares surged nearly 5% Tuesday morning, getting a boost from some recent electric vehicle (EV) sales data. The stock also received support from a bullish call by a Wall Street analyst.

Tesla shares pared some of the early gains with the stock trading higher by 2% as of 2:22 p.m. ET.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Can Tesla stock reach $800?

In a recent report, Morgan Stanley analysts raised Tesla's price target from $400 to $430 per share. They also offered a bull case scenario on which the firm applies a price target of $800 for Tesla based on its robotaxi potential.

Another catalyst today came from a report from EV research firm Rho Motion. The firm reported that December marked the fourth consecutive global monthly record of passenger car and light-duty EV sales. Importantly, it said that all major regions showed monthly sequential and year-over-year growth in December. It marked a new monthly record with over 1.9 million EVs sold, a 5% increase over the prior record. That includes battery electric as well as plug-in hybrid models.

That momentum bodes well for Tesla, the global EV leader. But it won't get the stock price to $800 alone. Morgan Stanley lead analyst Adam Jonas does see a path to that level, though, as he emphasized the increasingly important role of artificial intelligence (AI) in Tesla's plans. A fully autonomous robotaxi network is what Jonas sees as potentially pushing the stock to his bull case price target.

While investors shouldn't expect the stock to jump to the potential $800 price, they should monitor Tesla's progress using data collection and AI to launch a full self-driving software package. If it does offer that software to Tesla owners, an autonomous fleet of highly profitable robotaxis might not be far behind.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 862% — a market-crushing outperformance compared to 170% for the S&P 500.*

They just revealed what they believe are the 10 best stocks for investors to buy right now… and Tesla made the list -- but there are 9 other stocks you may be overlooking.

See the 10 stocks »

*Stock Advisor returns as of January 13, 2025

Howard Smith has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.