TSLA Inc.

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Bullish +65

Why Tesla stock is climbing over 4% on Monday

📈 TSLA shares jumped over 4% in early trading to $396.64 as investors anticipated Thursday's Q2 delivery report.

🤖 Elon Musk announced a rollout of FSD software for older AI3 hardware, potentially expanding the subscription market despite limited memory bandwidth compared to AI4.

📊 Morgan Stanley raised its Q2 delivery forecast to ~413k units from 373k, citing strong European registrations and recovering Chinese demand.

🇪🇺 Barclays upgraded expectations to ~418k deliveries, projecting Europe's strongest regional performance since 2023 with ~90k units.

🇨🇳 China delivery momentum is returning, with projections of roughly 135k vehicles supported by domestic sales rebounds in May.

⚡ Analysts remain cautious on energy storage, with Morgan Stanley forecasting 11.8 GWh deployments versus Street expectations of ~14.3 GWh.

🧠 Investor focus has shifted toward AI initiatives like Robotaxi and Optimus, though vehicle deliveries are still essential for funding these programs.

💰 FSD subscription pricing remains at $99/month, with the new rollout aiming to improve functionality for older car owners.

Bullish Signals
  • TSLA stock rose over 4% in early trading, recovering ground after a difficult week and signaling renewed investor confidence ahead of earnings.
  • Morgan Stanley raised its Q2 delivery forecast to approximately 413,000 vehicles from a prior estimate of 373,000, indicating improving demand fundamentals.
  • Barclays increased its delivery expectation to roughly 418,000 units, projecting European deliveries of ~90,000, the strongest regional performance since 2023.
  • China momentum is returning with domestic sales rebounding in May after two months of declines, supporting a projected 135,000 vehicle delivery volume.
  • Elon Musk's announcement of FSD software rollout for older AI3 hardware could expand the addressable market for the $99/month subscription service.
Risk Factors
  • Morgan Stanley forecasts Q2 energy storage deployments of 11.8 GWh, which is significantly below Street expectations of roughly 14.3 GWh.
  • Analysts caution that if energy storage deployments lag while vehicle deliveries beat, the market may treat the energy business as a drag on margins and cash flow.
  • Investor attention has increasingly shifted away from automotive operations toward AI initiatives like Robotaxi, potentially reducing near-term valuation focus on vehicle sales.
Full Analysis
Tesla (TSLA) shares rose over 4% in early Monday trading, reaching $396.64, as investors looked ahead to the company's second-quarter delivery report scheduled for Thursday. The rally was bolstered by fresh comments from CEO Elon Musk regarding a new rollout of Full Self-Driving software on older AI3 hardware, which could expand the subscription addressable base despite technical challenges compared to newer AI4 systems. Wall Street analysts have significantly upgraded their delivery forecasts ahead of the print. Morgan Stanley raised its estimate to approximately 413,000 vehicles from 373,000, citing a rebound in European registrations and improving momentum in China. Barclays also increased its forecast to roughly 418,000 units, projecting strong regional performance in Europe and solid domestic sales in China following recent declines. Despite the bullish sentiment on vehicle deliveries, analysts maintain caution regarding Tesla's energy storage business. Morgan Stanley forecasts second-quarter deployments of 11.8 GWh, which falls short of Street expectations around 14.3 GWh. This divergence suggests investors may view the energy segment as a potential drag on margins and cash flow in the near term, even as the broader market focuses on AI initiatives like Robotaxi and autonomous driving. The article highlights that while investor attention has shifted toward long-term AI ambitions such as Optimus and Robotaxi, strong vehicle deliveries remain critical for generating the necessary cash flow to fund these programs. If Tesla beats the raised delivery estimates, the stock could re-rate from a 'delivery disappointment' narrative back to one emphasizing execution and AI optionality.