Tesla Inc.'s shares edged lower in early Thursday trading, reflecting a modest pullback after a strong gain the previous session, as investors weighed fresh optimism around the company's autonomous driving and robotics ambitions against ongoing regulatory scrutiny and market volatility.

Tesla has suffered from protests targeting its founder Elon Musk
AFP

Tesla (NASDAQ: TSLA) opened around $401.57 and was trading at approximately $403.50 to $403.64 by mid-morning Eastern Time, down about 0.6% from Wednesday's close of $405.94. The electric vehicle giant's market capitalization hovered near $1.52 trillion, with intraday volume exceeding 12 million shares.

The modest decline followed a 3.44% surge on Wednesday, when shares closed at $405.94 after climbing from an open of $397.85 and ranging between $394.58 and $408.33. That rebound came on the heels of Bank of America's decision to reinstate coverage of Tesla with a "Buy" rating and a $460 price target, implying roughly 14% upside from recent levels.

BofA analysts highlighted Tesla's leadership in consumer autonomy, citing advances in Full Self-Driving (FSD) technology and its robotics ventures as key drivers. "Tesla is the current leader in consumer autonomy," the firm noted in a client report, pointing to potential market share gains in a shifting regulatory landscape for electric vehicles and autonomous systems.

The upgrade injected fresh confidence into a stock that has navigated choppy waters in 2026. After hitting a 52-week high of $498.83 in late December 2025, TSLA has pulled back but remains well above its 52-week low of $214.25, achieved earlier in 2025. Year-to-date performance has shown resilience, with the stock up significantly from earlier lows amid broader enthusiasm for AI-integrated mobility solutions.

Tesla's momentum stems partly from Elon Musk's bold vision for artificial general intelligence (AGI) and humanoid robots, positioning the company beyond traditional automotive manufacturing. Recent commentary from Musk has emphasized Tesla's role in leading AGI development, with ambitious timelines for robotaxi deployment and Optimus humanoid robot production.

Sales data has provided additional tailwinds. Reports indicate robust growth in Europe during February, suggesting a potential turnaround in key markets where EV adoption had faced headwinds from competition and economic pressures. Strong deliveries and expanding energy storage business have bolstered revenue streams, with trailing twelve-month figures showing solid contributions from non-auto segments.

Yet challenges persist. Tesla faces a critical deadline on March 9 to submit detailed data on its Full Self-Driving system to the National Highway Traffic Safety Administration (NHTSA), part of an ongoing investigation into traffic incidents and system performance. Analysts warn that any adverse findings could pressure the stock, particularly as regulatory oversight intensifies for autonomous technologies.

Wall Street remains divided on Tesla's valuation. The stock trades at a lofty price-to-earnings ratio exceeding 377, reflecting bets on future growth from robotaxis, AI and energy rather than current automotive margins. Some analysts express caution over execution risks in Musk's robotics push, while others see untapped value in software and autonomy.

" Tesla's self-driving effort could be worth more than double its EV division," one market analysis suggested, underscoring the narrative shift toward AI and robotics as primary value drivers.

Broader market context also influences TSLA. With interest rates and inflation dynamics in flux, growth stocks like Tesla remain sensitive to macroeconomic signals. However, renewed analyst confidence and positive sales indicators have helped stabilize sentiment.

Looking ahead, Tesla's first-quarter earnings, expected around late April, will provide further clarity on delivery numbers, margins and progress on Cybercab and Optimus initiatives. Prediction markets and investor forums show mixed conviction on near-term milestones, but many view dips as buying opportunities amid long-term upside potential.

Tesla's stock has historically been volatile, driven by product launches, regulatory news and Musk's public statements. Wednesday's gain illustrated how quickly sentiment can shift on positive catalysts, while Thursday's early softness serves as a reminder of profit-taking and broader caution.

Investors continue to monitor developments closely, balancing enthusiasm for Tesla's transformative technologies against execution hurdles and competitive pressures in the EV space.

As of mid-morning trading on March 5 (U.S. time), with markets still open, Tesla shares showed resilience near $403, down modestly but holding key support levels. The coming weeks, particularly around the NHTSA deadline and quarterly updates, could prove pivotal in determining whether 2026 marks a consolidation phase or renewed breakout for the EV pioneer.