Why Tesla stock is surging over 3% on Tuesday

Tesla shares rose about 3% to $363.89 in early trading Tuesday, supported by a Wall Street upgrade ahead of next week’s earnings report.

The broader market also moved higher. The S&P 500 rose 0.4%, while the Dow Jones Industrial Average gained 158 points, or 0.3%. The Nasdaq Composite advanced 1%.

Markets remained resilient despite lingering uncertainty around US-Iran tensions.

UBS upgrade signals balanced outlook

UBS analyst Joseph Spak upgraded Tesla to Hold from Sell, while maintaining a $352 price target.

Spak said current levels “more evenly balance” near-term challenges, including weaker EV demand and rising spending on artificial intelligence initiatives such as robo-taxis and humanoid robots.

He added that Tesla’s valuation remains heavily tied to future AI applications, estimating the company could be worth around $1.6 trillion based on fully diluted shares.

Spak also noted that “the stock may continue to exhibit high volatility,” describing Tesla as driven more by sentiment and momentum than fundamentals.

UBS expects Tesla’s vehicle deliveries to reach about 1.6 million in 2026, roughly flat year-on-year, and grow at a 7% compound annual rate to around 2 million by 2030—well below broader market expectations of 3 million.

The more cautious outlook reflects rising competition from Chinese automakers, softer demand in the US, and a limited pipeline of new vehicle models.

Tesla’s stock performance has also been under pressure.

Coming into Tuesday trading, shares were down 22% year-to-date, though still up 40% over the past 12 months.

The stock is in an eight-week losing streak and has fallen 18% since fourth-quarter earnings in late January.

AI and Robo-Taxis take centre stage

Investor focus is increasingly shifting toward Tesla’s AI ambitions.

The company launched a robo-taxi service in Austin, Texas, in June, though expansion has been gradual.

Elon Musk has said robo-taxis could operate in “dozens” of cities by 2026, but Austin remains the only market with commercial operations so far.

Tesla is also investing heavily in robotics, positioning itself as a “physical AI” company.

Shanghai plant may play role in robotics

Tesla’s China president Allan Wang Hao said the company’s Shanghai Gigafactory could play a key role in manufacturing humanoid robots in the future.

“Like other Tesla factories, Giga Shanghai can shoulder important responsibilities in manufacturing all new products, including robots, to make our contributions to the company,” Wang said.

“We are highly confident in welcoming the arrival of a new era of robots.”

He described the facility as a potential “golden key” to scaling production of humanoid robots, marking the first time a Tesla executive has publicly highlighted Shanghai’s role in this strategy.

Investors will get more clarity when Tesla reports first-quarter results on April 22.

Given the scale of retail participation in Tesla stock, investors globally will be closely tracking its moves on their online trading platforms ahead of the company's earnings.

Wall Street expects earnings per share of 38 cents, compared with 27 cents a year earlier, supported in part by higher deliveries.

Tesla delivered about 358,000 vehicles in the first quarter of 2025, up from 337,000 a year earlier.