Tesla stock hits record as Wall Street rallies around robotaxi hype despite slow EV sales

Core Viewpoint - Tesla's stock has rebounded significantly after a rough start to the year, reaching an all-time high of $489.48, following a 36% decline in the first quarter [1][2]. Group 1: Stock Performance - After a 36% plunge in Q1, Tesla shares rallied to an all-time high of $489.48, surpassing the previous record of $488.54 [1][2]. - Tesla's market capitalization increased to $1.63 trillion, making it the seventh-most valuable publicly traded company [2]. Group 2: Business Developments - CEO Elon Musk announced that Tesla has been testing driverless vehicles in Austin, Texas, which has sparked investor optimism regarding the company's long-standing promise to develop robotaxis [2][3]. - Tesla reported a 12% increase in third-quarter revenue, driven by a rush of buyers taking advantage of a federal tax credit that expired at the end of September [6]. Group 3: Challenges and Competition - Despite the recent stock rally, Tesla faces ongoing challenges, including a loss of the federal tax credit, backlash against Musk, and strong competition from companies like BYD, Xiaomi, and Volkswagen [7]. - The introduction of more affordable variants of the Model Y SUV and Model 3 sedans has not significantly boosted U.S. or European sales, with U.S. sales dropping to a four-year low in November [8]. Group 4: Analyst Insights - Mizuho raised its price target on Tesla to $530 from $475, maintaining a buy recommendation, citing improvements in Tesla's Full Self-Driving technology as a potential driver for accelerated expansion of its robotaxi fleet [9].