Tesla stock (TSLA) fell more than 3% on Monday as investors continued to wait for further progress in the company’s artificial intelligence initiatives.
The electric-vehicle maker’s stock traded at $393.56 during Monday’s session.
The broader market also came under pressure after President Donald Trump announced he was reinstating what he described as a blockade on Iranian shipping through the Strait of Hormuz.
The S&P 500 fell 0.4%, while the Nasdaq Composite lost 1%. The Dow Jones Industrial Average declined 132 points, or 0.3%.
Trump said in a post on Truth Social: “We are reinstating the THE IRANIAN BLOCKADE, so named because it is only stopping Iran’s ships or customers from entering or leaving.”
Investors await AI milestones
Tesla investors have increasingly focused on the company’s artificial intelligence strategy, particularly the rollout of its autonomous robotaxi service and the commercialization of its Optimus humanoid robot.
The company launched its robotaxi service in Austin, Texas, in June 2025. While the launch generated significant attention, the expansion has progressed gradually.
The service now operates in several cities but remains substantially smaller than Alphabet’s Waymo.
Tesla has yet to begin commercial sales of Optimus, although it is preparing manufacturing capacity for the humanoid robot.
On Friday, the company released a video showing the decommissioning of the Model S and Model X production lines at its Fremont, California, facility.
According to Tesla, the process of removing tooling and infrastructure took less than 50 days, allowing the factory to prepare for Optimus production while continuing to manufacture Model 3 and Model Y vehicles.
Tesla announced in January that it would discontinue production of the Model S and Model X to repurpose manufacturing capacity for robots. Chief Executive Elon Musk has described humanoid robots as a multi-trillion-dollar opportunity.
Despite those plans, investors continue to await updates on the latest version of Optimus as competing robotics companies.
Tesla is expected to provide additional updates on Optimus when it reports second-quarter earnings on July 22.
Wall Street analysts are raising price targets
Jefferies raised its price target on Tesla to $400 from $375 while maintaining a Hold rating, citing the company’s stronger-than-expected second-quarter automotive deliveries.
Tesla reported second-quarter deliveries of 480,126 vehicles, including 467,800 Model 3 and Model Y units, exceeding the consensus estimate of around 410,000 vehicles.
Following the delivery results, Jefferies increased its second-quarter earnings before interest and taxes estimate to $1.45 billion, representing a 5.1% margin.
The firm also increased its automotive revenue forecast to $21 billion, including $250 million in zero-emission vehicle credits and $500 million in leasing revenue.
Jefferies expects total group revenue of $28.7 billion and group EBIT of $1.45 billion for the quarter.
Earlier this month, RBC Capital raised its price target on Tesla to $500 from $475, incorporating a premium tied to a potential merger with SpaceX while also updating its standalone valuation for the automaker.
Analyst Tom Narayan said the revised target reflects “a 25-30% premium to current trading levels (and a 15% premium to the stock’s intrinsic value) owing to a potential SpaceX acquisition scenario based on unconfirmed media reports.”
According to RBC, the most likely transaction structure would involve an all-stock acquisition in which SpaceX acquires Tesla at a 20% to 30% premium.
The firm said the rationale centers on operational collaboration, including proprietary chip manufacturing, Megapacks for data center energy requirements, and joint AI training and fleet management services.
RBC also said Tesla shareholders would likely require a premium because Musk “would control 50%+ of a combined entity, well above the ~20% stake he currently holds in Tesla.”
Excluding any potential SpaceX acquisition premium, RBC valued Tesla at $435 per share.
Within that valuation, Narayan increased the firm’s robotaxi segment valuation by 20%, citing a higher forecast for the global robotaxi fleet and describing the business as “currently Tesla’s most robust opportunity” within a $4.2 trillion total addressable market.
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