Brief Summary of Update:
Tesla continues its rebound to $329.60 (up 2.27% from the previous report), breaking above $330 and strengthening the short-term upside correction. However, strategic shifts in the company’s AI plan, including the shutdown of the Dojo project, add new risks to its long-term growth outlook.
Key Updates
Since the last report Tesla has posted a solid gain of 2.27%, reaching $329.60. The headline event was the cancellation of the Dojo supercomputer project, with Elon Musk announcing a pivot to real-time inference chips. Despite investor concerns, the stock kept climbing, suggesting the market views the strategic shift positively.
Current Trend
Tesla is showing a short-term bounce, up 8.91% over the past five days and 11.39% over the month, but remains under long-term pressure, down 18.38% year-to-date. Breaking the $330 level reinforces the short-term upward momentum that began after the August correction from the lows.
Investment Thesis
The thesis rests on Tesla’s leadership in electric vehicles, autonomous driving and energy solutions. Moving from Dojo to specialized inference chips could free resources and speed up FSD rollout, supporting long-term growth prospects.
Thesis Status
The thesis is still valid but the AI component needs reassessment. Shutting down Dojo may be seen as a rational reallocation toward more practical autonomous-driving hardware, yet it raises questions about Tesla’s ability to compete in AI computing against tech giants.
Key Drivers
The primary driver is the decision to cancel Dojo and shift to inference chips. Additional influence comes from Trump-era tariffs hurting the auto industry, with an estimated $11.7 billion impact. Positive analyst sentiment, including Dan Ives of Wedbush, also fuels interest in the stock.
Technical Picture
Tesla trades at $329.60, having broken resistance at $330 and bolstering its upward impulse. The short-term trend stays positive with an 8.91% gain over five days. Key support sits around $320-$315, while resistance lies near $340-$350. RSI and momentum indicators point to continued upward correction.
Bull Case
- Strategic pivot from Dojo to practical inference chips could accelerate commercializing FSD – source
- Steady short-term gain (+11.39% month-over-month) shows renewed investor interest after the summer pull-back
- Positive media coverage and active top analysts boost sentiment – source
- Cost cuts from shutting down inefficient projects could improve margins
- Technical break above $330 opens the path to further upside toward $340-$350
Bear Case
- Dojo’s shutdown raises doubts about Tesla’s ability to compete in AI computing with tech leaders – source
- Trump tariffs pressure the entire auto sector, costing an estimated $11.7 billion – source
- A year-to-date decline of 18.38% signals structural challenges
- Loss of key talent from the Dojo team could hamper AI development – source
- Broad sector pressure and uncertainty over future tariff policy create macro risks