Tesla stock rebounded on Tuesday morning, rising around 5% in early trading as investors sought signs of stability following a sharp decline over the past week.
The stock’s rise coincides with a broader market rebound, following President Trump’s Truth Social post on Tuesday about a “great call” with South Korea’s acting president and China’s apparent eagerness to strike a deal.
The electric vehicle maker’s shares had been under significant pressure since President Donald Trump’s announcement of higher-than-expected tariffs, despite Tesla’s relatively limited exposure to the policy compared with some traditional automakers.
By mid-morning, Tesla shares were trading at $244.65, up around 5%.
The S&P 500 and Dow Jones Industrial Average also gained ground, rising 2.8% and 2.6%, respectively.
Prior to Tuesday’s rally, Tesla stock had declined 17.5% over the previous three sessions.
Morgan Stanley remains bullish on Tesla
Despite the recent volatility, Morgan Stanley analyst Adam Jonas continues to rate Tesla as a “Top Pick” with an Overweight rating and a $410 price target.
In a note to clients, Jonas emphasized that Tesla’s value proposition extends well beyond the electric vehicle segment, which he described as facing increasing pressure.
“Tesla’s capabilities in key areas of physical AI, including data, robotics, energy storage, compute, manufacturing, and space/comms/networking/infrastructure offer growth and margin opportunities that greatly exceed those of the traditional EV business,” Jonas wrote.
He noted that Tesla could play a more prominent role in sectors linked to national security, particularly as autonomous technologies evolve and intersect with government and defense needs.
Jonas pointed to rising investor interest in the dual-use potential of autonomous systems.
Looking ahead, he suggested Tesla may reach milestones in 2025 that further solidify its position in the broader AI-driven industrial landscape.
“The ability to ‘produce’ labor in a factory… as machines make machines with minimal human intervention may alter historical measurements such as dependency ratios, retirement age, and GDP per capita,” Jonas wrote, underscoring the long-term implications of automation and advanced manufacturing.
Musk and Trump bromance over?
Elon Musk made direct, but ultimately unsuccessful, appeals to President Trump over the weekend to reverse the sweeping tariffs unveiled last week, according to the Washington Post, citing two sources familiar with the matter.
This marks the most high-profile rift between Musk and Trump to date.
The clash comes after Trump announced a 10% baseline tariff on all US imports, with steeper duties aimed at specific countries.
Musk, who has been advising the administration on cost-cutting through his role in the new “Department of Government Efficiency,” pushed for zero tariffs between the US and Europe during a virtual appearance at a League Party event in Florence over the weekend.
Tesla, meanwhile, continues to face investor blowback.
Quarterly sales have dropped sharply, and shares closed Monday at $233.29, down over 42% year-to-date.
Musk’s personal fortune has taken a steep hit, falling $4.4 billion on Monday alone, bringing his year-to-date losses to $134.7 billion, per the Bloomberg Billionaires Index.
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