Tesla’s stock steadied on Wednesday after a volatile prior session, as investors digested a growing list of competitors positioning themselves for opportunities in artificial intelligence, autonomous driving and robotics—areas that underpin much of the bullish narrative around the electric-vehicle maker.
Shares of Tesla were up 1.14% at $437.31 in midday trading, outperforming the broader market.
The Dow Jones Industrial Average was up about 0.6%, while the S&P traded 0.2% higher.
Rebound follows Nvidia-led selloff
Wednesday’s gains came a day after Tesla stock dropped 4.1%, following announcements from Nvidia that unsettled investors focused on Tesla’s long-term autonomy ambitions.
Nvidia unveiled “Alpamayo,” a computing platform designed to serve as a central brain for autonomous vehicles.
Nvidia has spent years developing technology for self-driving cars, though it has no plans to manufacture vehicles itself.
Instead, the company aims to supply chips, computers and software tools that automakers and developers can use to build autonomous systems. These tools include simulation environments and virtual worlds that allow AI-enabled vehicles to be trained at scale.
For Tesla, the concern among investors is not immediate competition in selling cars, but rather the potential erosion of its perceived lead in self-driving technology.
If Nvidia’s platform enables a wide range of automakers to deploy advanced autonomous systems, Tesla’s ability to dominate the robo-taxi market could be challenged.
Many bullish Wall Street analysts currently value Tesla’s robo-taxi opportunity in the hundreds of billions—or even trillions—of dollars.
Alphabet’s Waymo and Tesla both plan significant expansions of their robo-taxi operations in 2026.
While meaningful revenue from humanoid robots is still likely years away, investors in Tesla are keenly focused on whether the company can secure a dominant share of these emerging markets.
Musk downplays near-term threat
Responding to questions on X about Nvidia’s Alpamayo platform, Tesla CEO Elon Musk said that even with Nvidia’s support, it would take “several years” for other automakers to develop self-driving systems that are safer than human drivers.
He added that scaling cameras and AI computers across vehicle fleets would also take additional years.
Musk said the technology could become “competitive pressure on Tesla in five or six years,” though he suggested the timeline may be longer.
His comments come as Tesla continues expanding tests of its Full Self-Driving software, including trials of fully autonomous robotaxis in Austin with no driver in the seat.
For now, Tesla investors remain caught between optimism about AI-driven growth and rising uncertainty over how crowded the autonomous future may become.
Bearish analysts question valuation
Not all analysts share the optimism surrounding Tesla’s AI-driven future.
GLJ Research reiterated a Sell rating on Tesla and raised its price target to $25.28 from $19.05, citing concerns about the company’s core automotive business.
The firm estimates that Tesla’s automotive segment accounts for 72.2% of sales and described it as “fledgling,” despite projecting 12.1% year-over-year growth in the Energy Generation & Storage segment, which it estimates operates at 31.2% margins.
GLJ Research forecasts fourth-quarter revenue of $24.1 billion, free cash flow of $365 million and non-GAAP earnings per share of $0.39, all below consensus estimates.
Tesla is scheduled to report earnings on January 28, 2026.
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