Tesla Shares Rise About 2% While Market Drops

Tesla shares rose about 2% in early U.S. trading on Monday, outpacing major indexes as investors assessed linkages between the electric-vehicle maker and SpaceX. The S&P 500 slipped 0.3%, the Nasdaq fell 1.1% and the Dow Jones Industrial Average gained about 0.3% (167 points).

Newly listed SpaceX declined roughly 8% after earlier dropping as much as 11%, a move that coincided with renewed discussion about a potential combination involving Elon Musk’s companies. Traders shifted attention from SpaceX’s share weakness to the possibility of a future merger with Tesla.

In a research note published Friday, Jefferies maintained a Hold rating on Tesla and raised its price target to $375 from $350. The firm wrote that if a consensus forms that a merger is likely and imminent, Tesla could begin trading more like a proxy for SpaceX’s performance rather than on Tesla’s own operating results. Jefferies also noted its models assume early deployments of robotaxis and humanoid robots will initially generate losses, and described current valuation and estimates as disconnected from near-term financial results.

Investor activity included purchases by ARK Invest. Filings show ARK bought 54,815 Tesla shares on Friday, acquiring 43,998 shares for the ARK Innovation ETF and 10,817 shares for the ARK Next Generation Internet ETF. Tesla remains the largest holding in ARK Innovation at about 9.7% of the fund and the second-largest holding in the Next Generation Internet ETF at roughly 7.9%.

Technology stocks broadly weighed on the session. Alphabet fell about 6% amid concerns over departures of AI talent, while Amazon and Meta Platforms declined roughly 4% and 3%, respectively. Microsoft slid about 2%. Market participants expressed differing views on Tesla’s outlook: some investors seek exposure to the company’s AI projects and potential synergies with SpaceX, while others highlighted near-term risks and the likelihood that new business lines may be loss-making initially.