A Tesla car charges at a Tesla Supercharger station on March 30, 2026 in Pasadena, California.
Justin Sullivan | Getty Images
tesla Shares rose more than 6% on Wednesday as CEO Elon Musk touted advances in the company’s upcoming AI5 chip.
Musk said in a post on his social network X on Wednesday that the chip has reached key engineering milestones and is nearing mass production.
Tesla also plans to partner with SpaceX to build two advanced chip factories in Austin, Texas. One will make chips for vehicles and robots, and the other will make chips for use in orbital data centers.
Intel recently joined the Tesla-SpaceX Terafab project.
Analysts at UBS on Tuesday raised their rating on the stock from “sell” to “hold” and raised their price target by about $1 to $352.
UBS analysts led by Joseph Spak wrote in an upgrade that the news that Tesla is working on a new small SUV is a “welcome development” given the company’s view that Tesla’s current small car lineup is “too limited”, in a departure from its previously bearish outlook.
The company’s lineup currently includes the Model 3 sedan, Model Y SUV, and the angular steel Cybertruck. The company has suspended sales of its main vehicles, the Model S and Model X, in order to transfer part of its Fremont, California, plant to production of the humanoid robot Optimus, which is currently under development.
The rise in stock prices was also due to Tesla starting a spring update to its in-vehicle software. This includes the ability for customers to easily subscribe to the company’s premium fully self-driving (supervised) option, as well as the ability to view usage statistics on a touchscreen.
FSD (Supervised) currently costs $99 per month in the US and can handle some steering, lane changes, and parking automatically under active supervision of the driver. FSD (supervised) does not make a Tesla autonomous.
The company is testing a small number of self-driving cars at its ride-hailing service Robotaxi in Austin, Texas.
The spring software update also includes changes to the in-vehicle capabilities of Grok, an AI chatbot developed by Musk’s xAI, which is now owned by his rocket maker SpaceX. Drivers can now launch the app by saying “Hey Grok” and use it hands-free in their Tesla EV.
For more than a decade, Mr. Musk has promised that Tesla is on the verge of offering self-driving, or “robotaxi-enabled,” vehicles to customers. The system is evolving, but it’s not here yet.
CNBC’s Michael Bloom contributed to this report.
