Tesla stock sheds 10% in two days as tech selloff roils EV-maker

Tesla (TSLA) stock slid again on Friday, following a rough Thursday as the broader market continues to sell off. The stock is now down close to 15% since since CEO Elon Musk received his $1 trillion pay package.

Including today’s 4% move lower, Tesla stock is down 14% for the week, and has dropped well below the psychologically important $400 support level. The stock is hitting its lowest levels since early September.

Weighing on Tesla and the broader tech market is the declining probability of a December interest-rate cut, pressuring riskier assets like Big Tech.

AI spending concerns are also driving an exodus to less hotly valued sectors. In addition to Tesla shares dropping, Nvidia (NVDA) is also down another 3%.

For Tesla investors, the promise of the near future powered by AI and autonomous is where bulls are looking. The latest to weigh in on that outlook is Morgan Stanley’s Adam Jonas.

In his “way too early” 10 robot predictions for 2026, Jonas notes Tesla will pulls the safety driver in its robotaxi tests in Texas, and at least 1 other US state where Tesla has promised expansion. “2026 is the year when robotaxis cross over from science fiction to reality with consumers, investors,” he wrote.

Musk said at Tesla’s recent shareholder meeting that Austin’s robotaxi safety drivers would be removed by the end of the year. He added that Miami, Dallas, Phoenix, and Las Vegas will be the next cities to test Tesla’s robotaxi service.

In addition, Jonas predicts Tesla and Musk’s xAI getting closer. In particular, this will help Tesla build out its Optimus bot production.

“A Tesla robot plant is the ‘mother’ of the next generation of robots. The value of xAI’s expanding capabilities in compute and ‘truth-seeking’ AI will become increasingly conspicuous over time,” he said.

Tesla revealed at the shareholder meeting that it will build a 1 million-unit Optimus production line at its factory in Fremont, Calif., and eventually a 10 million-unit line at Giga Texas in Austin. Currently Optimus is in pilot production at Fremont.

Jonas has an Overweight rating on Tesla with a near-term $410 price target, and a “bull case” of 800.

Yesterday, Wedbush’s Dan Ives added that the automaker’s AI future is where investors should be looking.

“In my opinion, it’s going to be the most important chapter ever in Tesla’s story,” Ives said from the Yahoo Finance Invest event in New York.

Ives, who has called passage of Musk’s pay package a “bright green light” for Tesla’s AI and autonomous tech plans, has an Outperform rating on the stock and a Street-high $600 price target.

Pras Subramanian is the Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.