Tesla shares are on track to post their first weekly gain in a month, snapping a three-week losing streak that wiped out more than a fifth of the stock's value.
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Tesla stock rises 3.5% to snap three-week losing streak
Tesla shares rose 3.5% this week, on track to snap a three-week losing streak that left the stock down 24% over the past month.
The rebound tracked the usual suspects — renewed optimism over Full Self-Driving and the artificial-intelligence narrative that now anchors the company's valuation. Tesla is working toward European approval for its FSD driver-assistance product, a step that could unlock a new earnings stream, according to Barron's.
The stock closed near $319.53, still 36% below its 52-week high of $498.83 and beneath both its 50-day moving average of $388.86 and 200-day average of $411.06. Tesla remains down 29% year to date, with a market value of about $1.27 trillion. The weekly advance came even as the broader market traded near records, with the Dow and S&P 500 hovering around all-time highs through the session.
The weekly gain offers a reprieve after a brutal stretch, but the stock's valuation — trading at 303 times trailing earnings — leaves little room for error as Tesla bets on self-driving software and AI to justify the premium.
Full Self-Driving Approval Looms
Tesla's push into Europe is the clearest near-term driver. European approval for FSD would open a market where the company has yet to monetize its driver-assistance software, adding a high-margin revenue stream on top of vehicle sales. The company has framed FSD as the key to its future earnings, and any regulatory green light would give investors a concrete milestone to anchor expectations. Analysts have long argued that software revenue, not vehicle sales, is what separates Tesla from traditional automakers and justifies its premium multiple.
The self-driving market is large enough to matter. Global spending on autonomous-driving software and hardware is projected to grow into the hundreds of billions of dollars over the next decade, a prize that has drawn rivals including Alphabet's Waymo and General Motors' Cruise. Tesla's camera-based approach differs from the lidar-heavy systems used by competitors, and European regulators will weigh that trade-off in any approval decision.
The SpaceX AI Link
Tesla's week also tracked the fortunes of SpaceX, the rocket company run by the same chief executive, Elon Musk. SpaceX shares fell 13.6% on Wednesday after its first-ever earnings report showed heavy capital spending on AI, dragging Tesla lower with it. The two stocks have become increasingly linked by Musk's AI ambitions, with both companies pouring resources into compute infrastructure.
Tesla's own AI spending is a double-edged sword. The company is building out data centers and chip capacity to support self-driving and robotics, a capital-intensive bet that has pressured margins even as it underpins the bull case. Investors are weighing whether the AI push will eventually pay off in software revenue or continue to drain cash. For now, the market is rewarding the week's rebound, but the stock remains far below the levels it traded at earlier this year, and the path back to its highs runs through regulatory approvals and proof that the AI bet can generate returns.
This article is for informational purposes only and does not constitute investment advice.
