Tesla stock reverses higher as tech shakes off Thursday’s big sell-off

Tesla (TSLA) stock slid early Friday but reversed higher as the broader market recovered from yesterday’s sell-off. Despite today’s move, Tesla stock is down around 9% since CEO Elon Musk received his $1 trillion pay package.

Including Friday’s slight tick higher, Tesla stock still finished down 5.9% for the week, and had dropped well below the $400 support level before bouncing back to close at $404.35. Yesterday, the stock hit lows not seen since September.

Weighing on Tesla and the broader tech market earlier today was the declining likelihood 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.

Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments

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

In his 10 “way too early” robot predictions for 2026, Jonas anticipates that Tesla will remove the safety driver from its Robotaxi tests in Texas and at least one 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 predicted Tesla and Musk’s xAI (XAAI.PVT) 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 wrote.

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.