Tesla shares climb more than 6% on chip-tech progress, analyst upgrade

In this articleTesla stock rose more than 6% on Wednesday as CEO Elon Musk touted progress on the company's forthcoming AI5 chip.Musk said in a post on his social network X on Wednesday that Tesla's forthcoming AI5 chip has reached a key engineering milestone and is getting closer to production.Tesla is also planning to build two advanced chip factories in Austin, Texas, in partnership with SpaceX, one to make chips for vehicles and robots, and another to produce chips for use in orbital data centers. Intel recently joined the Tesla-SpaceX Terafab project. UBS wrote that while Tesla's plan is sure to add to its capex, "Tesla is a $1.3T company with large growth ambitions, so worth trying."UBS analysts upgraded their rating on the stock from sell to hold on Tuesday, and increased their price target by about a dollar to $352.Flipping from a previously bearish outlook, UBS analysts led by Joseph Spak wrote in their upgrade that news Tesla is working on a new, smaller SUV is a "welcome development," given the firm's view that Tesla's current light-duty vehicle offerings are "too limited."The company's lineup currently includes its Model 3 sedan, Model Y SUV and angular steel Cybertruck. The company has stopped selling its flagship Model S and X vehicles in order to transition part of its Fremont, California factory to produce its humanoid robot, Optimus, now in development.The rising share price also comes after Tesla launched the Spring update for its in-vehicle software, including features that make it easier for customers to subscribe to the company's premium, Full Self Driving (Supervised) option, and to view statistics in their touchscreens about how often they are using it. CNBC's Michael Bloom contributed to this report.Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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