Tesla stock reversed early gains and fell around 3% on Thursday, as broader market weakness erased recent momentum and tempered optimism driven by supportive analyst commentary.
The stock had climbed as much as 1.4% in early trading to $434.51, extending its recent rally and putting a fifth consecutive day of gains within reach.
Tesla had risen about 8% over the previous four sessions. That early strength faded as selling pressure intensified across major indexes.
The Dow Jones Industrial Average and the S&P 500 both declined more than 1%, weighing on risk assets and pulling Tesla into negative territory.
Broader market pressure curbs rally
Thursday’s decline highlighted the fragility of Tesla’s recent rebound, which has unfolded against a backdrop of volatile trading and shifting sentiment around technology and growth stocks.
The stock’s recent gains had offered some relief after a period of consolidation following its January earnings report.
However, the broader market sell-off limited investors’ willingness to extend positions in high-valuation names, including Tesla.
With major benchmarks under pressure, Tesla’s early advance was unable to gain traction, reflecting continued sensitivity to wider equity market moves.
Waymo advances driverless technology
The pullback in Tesla shares came as rival autonomous vehicle developments drew attention.
Waymo, owned by Alphabet, said on Thursday that it has begun using its sixth-generation driverless system to provide robotaxi rides to employees on Ojai vehicles, which are based on models produced by Geely.
Waymo said the upgraded “Waymo Driver” system uses more cost-effective components and is designed to operate more reliably in harsher weather conditions than previous generations.
“The new system will serve as the primary engine for our next era of expansion,” Waymo Vice President of Engineering Satish Jeyachandran said in a statement.
The company is initially offering the service to employees and their guests in the San Francisco Bay Area and Los Angeles, with plans to expand gradually and open the platform to public riders later this year.
Waymo currently operates fully autonomous robotaxi services in six US markets and plans to begin service in London later this year.
Competitors, including Zoox, owned by Amazon, and Tesla, are testing driverless systems but have yet to deploy large-scale public services.
Waymo’s latest technology upgrade adds to pressure in the robotaxi space, an area that Elon Musk has repeatedly identified as central to Tesla’s future growth.
Analyst support underpins recent gains
Tesla’s advance earlier in the week had been supported in part by positive analyst commentary.
Morgan Stanley analyst Andrew Percoco highlighted potential upside from Tesla’s solar business in a recent research note, pointing to the company’s plans to expand solar manufacturing capacity.
“Tesla’s plan to vertically integrate solar manufacturing is representative of Elon Musk’s goal to send a significant amount of solar-powered data centers into space, while also driving synergies with its leading energy storage business,” Percoco wrote.
Further support came from Benchmark, which reiterated its Buy rating and maintained a $475 price target on Tesla.
The firm said Tesla is prioritising reinvestment and platform development over near-term earnings optimisation, describing 2026 as an “investment year” marked by increased spending on autonomy, artificial intelligence, robotics, and energy infrastructure.
Benchmark also pointed to resilience in margins, growth in the energy segment, and strong cash generation in the company’s fourth-quarter results.
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