News

What Happened?

Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) jumped 5.6% in the afternoon session after Politico reported that Elon Musk may soon step down from his position at the Department of Government Efficiency, indicating a renewed focus on his business ventures, especially Tesla.

According to the report, President Trump "has told his inner circle, including members of his Cabinet, that Elon Musk will be stepping back in the coming weeks from his current role."

The White House later called the report 'garbage' and clarified that there was an agreement in place that Elon Musk would leave his role when his job was done. Musk also weighed in on the social media platform X (formerly Twitter), calling the story "fake news."

Market reaction suggested investors viewed Musk's possible exit from the government role as a positive development for Tesla. Since assuming the position, concerns had grown over how his political involvement might affect the company's performance and public perception. The story seemed to have eased some of that uncertainty.

After the initial pop the shares cooled down and closed the day at $282.67, up 5.3% from previous close.

Is now the time to buy Tesla? Access our full analysis report here, it’s free .

What The Market Is Telling Us

Tesla’s shares are extremely volatile and have had 125 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock dropped 6.3% on the news that stocks pulled back (Nasdaq -1.5%, S&P 500 -1.2%) amid fresh concerns about trade tariffs. The pullback followed comments from President Trump clarifying the scope of his administration's 25% tariffs on Venezuela. He noted that it would apply to any country that does business with Venezuela. For example, 25% is on top of the already-in-place 20% tariff on China because China imports oil from Venezuela, which could translate to a 45% tariff on some Chinese goods. This announcement could significantly raise the operating costs for affected companies and institutions.

Tesla is down 23.8% since the beginning of the year, and at $288.92 per share, it is trading 39.8% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $9,536.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. We prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. .