Tesla surges 5% as JPM upgrade, SpaceX IPO fuel rally

Tesla Inc. shares jumped more than 5% in intraday trading Monday, extending a rally fueled by a J.P. Morgan upgrade and growing anticipation of Elon Musk's SpaceX initial public offering.

"The market is increasingly pricing Tesla for its autonomy and robotics potential rather than near-term auto fundamentals," said Rajat Gupta, equity analyst at J.P. Morgan, who upgraded the stock to neutral from underweight earlier this month. "Investor attention is shifting toward robotaxis, humanoid robotics and AI services, which could become major earnings drivers over the next decade."

Tesla traded at roughly $440 by midday, recovering from a year-to-date decline of about 4.3% before the recent rally. The stock has added about 23% since early April. J.P. Morgan projects Tesla's earnings per share could rise to approximately $7.50 by 2030 from around $1.95 in 2026, with revenue surging to $203 billion from $95 billion, according to a Reuters report. Autonomy, robotics and related services would account for nearly half of that growth.

The rally also coincides with SpaceX's preparations for what is expected to be the largest IPO in history. The rocket company plans to sell 555.6 million shares at $135 apiece on the Nasdaq under the ticker SPCX, raising about $75 billion and valuing the company at $1.75 trillion. Musk, who owns roughly 42% of SpaceX's equity and controls about 80% of voting power, has increasingly tied his ventures together — SpaceX absorbed his AI company xAI in a $250 billion all-stock deal earlier this year.

The broader market has been volatile. The S&P 500 snapped a nine-week winning streak on Friday, falling 2.6% for the week after a stronger-than-expected May jobs report pushed the 10-year Treasury yield to 4.55% and reduced expectations for Federal Reserve rate cuts. The tech-heavy Nasdaq Composite dropped 4.2% on Friday alone, though Tesla's gains Monday suggest investors are differentiating among mega-cap names.

For Tesla investors, the bet extends beyond electric vehicles. J.P. Morgan estimates the company's exposure to automotive, energy storage, robotaxis, humanoid robots and infrastructure licensing gives it access to a combined addressable market of roughly $3.9 trillion by 2035. Still, the brokerage cautioned that significant execution risks remain, particularly around securing regulatory approvals and scaling emerging technologies.

This article is for informational purposes only and does not constitute investment advice.