Why Tesla Stock Jumped Today Even as Sales Continue to Plunge

Shareholders in Tesla (NASDAQ: TSLA) received more troubling news today. Not only did sales drop in the important China market in April, its business there has reportedly continued to decline this month.

Yet shares jumped today. Tesla stock was 5.5% higher as of 2:58 p.m. ET. That reaction may have been due to CEO Elon Musk's visit to Saudi Arabia along with President Donald Trump and other U.S. business leaders. It also might be related to momentum carrying over from an easing trade dispute between the U.S. and China after progress over the weekend.

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Image source: Tesla.

Momentum in Tesla stock continues

Sales data from China showed Tesla's April sales declined almost 9% year over year in the world's largest electric vehicle (EV) market. Things haven't started to improve, either, as the company's overall 2025 sales in China have dropped by 56%, Barron's reported today.

Yet the stock is soaring this week. That was initially prompted by the signs of improving trade relations between the U.S. and China over the weekend. U.S. Treasury Secretary Scott Bessent and his Chinese counterpart announced a mutual reduction in reciprocal tariffs for 90 days while both parties work to find a solution to the trade disagreement.

Today, Musk was among U.S. business executives visiting Saudi Arabia for an investment forum led by President Trump. That market might not compare to China in size for EVs, but there's another angle for Tesla related to the visit.

The White House announced $600 billion in spending by Saudi Arabia in the U.S. on artificial intelligence (AI) and energy infrastructure, among other things. Investors are likely buying Tesla stock believing that some of that spending could be for the company's AI, energy, and robotics offerings. Potential growth in those segments is what has many investors investing in Tesla even as EV sales sink.

Musk may also be working to tap the Saudi market once Tesla's autonomous driving technology is perfected, which may hold the key to the EV maker being a winning investment. Many investors are betting on it.

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