Why Tesla stock is surging over 3% on Monday

Tesla stock TSLA rose on Monday, extending its recovery from a sharp post-earnings selloff.

The stock gained about 3% to $321.65 in midday trading, putting it on track for a third consecutive daily advance.

The broader market also moved higher, with the S&P 500 rising 1% and the Dow Jones Industrial Average adding 1.2%.

The gains followed a difficult period for Tesla shares, which fell more than 20% after the company reported weaker-than-expected second-quarter results on July 22.

The stock closed below $300 for the first time in more than a year last week after a six-session losing streak.

Tesla reported operating profit of about $400 million for the quarter, roughly $1.3 billion below Wall Street expectations, while providing limited new details on its artificial intelligence initiatives, including robotaxis and the Optimus humanoid robot.

European sales show mixed picture

Tesla's July registrations across Europe were mixed, according to data released on Monday.

Vehicle registrations rose 86% year over year in France and 52% in Denmark, according to French automotive body PFA and Denmark's bilstatistik.dk.

However, registrations declined in Norway, Sweden, and Spain.

Tesla's European sales have rebounded in 2026 after two consecutive annual declines, supported by easier year-over-year comparisons, higher fuel prices, government incentives, and stronger consumer demand for electric vehicles.

NHTSA opens preliminary investigation

Investor sentiment was little changed after the National Highway Traffic Safety Administration said on Friday that it had opened a preliminary investigation into about 1.2 million Tesla vehicles over reports of suspension failures.

The agency said its Office of Defects Investigation had received 156 complaints alleging that the front lower lateral link detached on certain 2018-2020 Model 3 and 2021-2023 Model Y vehicles, potentially causing a loss of steering control.

According to the agency, the reported failures could leave vehicles undrivable and require towing.

Most complaints indicated there was no advance warning before the failure, although some owners reported hearing noises beforehand.

The regulator said it was not aware of any crashes, injuries, or fatalities linked to the reported issue.

The investigation represents the first stage of the agency's defect review process and could ultimately lead to a recall if a safety-related defect is identified.

Stifel remains bullish

Despite those near-term regulatory concerns, several Wall Street firms continue to focus primarily on Tesla's longer-term AI strategy.

Following Tesla's second-quarter results, Stifel lowered its price target on the stock to $491 from $508 while maintaining a Buy rating.

The brokerage said Tesla continues to make progress in Full Self-Driving and robotaxi development, which it views as the company's primary long-term value drivers.

Stifel also cited Tesla's largest order backlog since 2023 and the launch of the Model YL as signs that vehicle demand is improving.

The firm said its valuation is based on a sum-of-the-parts analysis and identified adoption of Full Self-Driving technology and the commercial success of robotaxis as the biggest factors that could influence its investment thesis.