Tesla (TSLA) stock rose 5% in afternoon trading on Monday, wiping out its year-to-date losses after CEO Elon Musk purchased shares of the EV maker for the first time since 2020.
Tesla disclosed that Musk purchased 2.6 million shares on Friday, worth roughly $1 billion. Investors saw the move as a strong vote of confidence in the company as it leans into autonomous technologies such as robotaxis and humanoid robots.
The purchases came about a week after Tesla’s board proposed a pay package for Musk worth almost $1 trillion. The compensation package lays out aggressive goals over a 10-year span, including the electric vehicle maker’s robotaxi and humanoid robot businesses. The company also aims to lift its market cap to $8.5 trillion from roughly $1 trillion today.
Tesla stock has made a full recovery since sinking to a March low in the aftermath of a public fallout between President Trump and Musk, which later cooled off.
Read more about Tesla’s stock moves and today’s market action
Tesla’s robotaxi initiative and Musk’s departure from politics have fueled shares of the company. The stock is up more than 70% since Musk officially left DC and subsequently paused a proposal for a third political party in the US.
The billionaire’s early participation in Trump’s presidency appeared to hurt the Tesla brand as electric vehicle sales plummeted in Europe.
Meanwhile, China’s BYD (BYDDY) has eaten into Tesla’s market share, while the expiration of EV tax credits in the US has also raised concern over the electric vehicle business.
Tesla has leaned into its robotaxis, which launched for the first time in June in Austin, Texas, with plans to start testing in Nevada soon.
Beyond autonomous driving, Musk has been touting Optimus humanoids as the next major catalyst for growth.
Musk has said Tesla will eventually derive 80% of its value from robots that he claims will help humans with everyday tasks, from cooking dinner to walking the dog to babysitting.
“Optimus is going to be the greatest product in the history of humanity,” Musk said earlier this month on the “All-In” podcast.
Wall Street has 27 Buy ratings on Tesla stock, 19 Hold, and 5 Sell.
Morgan Stanley analyst Adam Jonas recently reiterated his Overweight recommendation on the stock and price target of $410 per share, based on how much of the global labor market could be replaced by humanoid robots.
“We estimate converting just 1% of the US labor force to humanoid is worth approximately $320bn or $100 per Tesla share,” Jonas wrote last week.
