Musk "lets go" of politics, regains control of autonomous driving and AI strategy to boost confidence, Tesla bulls reignite enthusiasm

According to Zhitong Finance APP, despite a significant decline in both delivery volume and profit for Tesla (TSLA.US) in the first quarter, the stock price rose against the trend before the market opened on Wednesday, after the company emphasized its steady progress in key projects related to autonomous driving and artificial intelligence.

Although Tesla did not provide annual delivery guidance due to the impact of changes in global trade policies, investors received a commitment from Musk that he would focus more on the company's business.

Musk stated during the earnings call that he would significantly reduce the time spent on government efficiency department (DOGE) matters. He mentioned that he would continue to spend one or two days a week on government-related affairs as long as the president needed him.

In response, Wedbush Securities raised Tesla's target price from $315 to $350. Analyst Dan Ives emphasized, "In our view, this is an opportunity for Musk to extricate himself from the affairs of the Trump White House. The global brand damage, political storms, and various chaotic situations over the past few months are finally coming to an end for Musk, marking the conclusion of this turbulent political chapter. Moreover, we expect that even if Musk focuses on DOGE in the future, the time he invests will be minimal."

Morgan Stanley warned that market expectations for Tesla are likely to continue to decline, but the actual performance remains largely within the lower expectation range of buyers. They also emphasized that the company maintained positive free cash flow this quarter. Adam Jonas stated that Tesla reaffirmed the timeline for AI-related projects (such as Cybercab and Optimus), which provided some relief to investors.

Bank of America believes that Tesla's first-quarter performance was slightly better than expected, but it still maintains a "neutral" rating on the electric vehicle stock. Analyst John Murphy pointed out that Tesla's gross margin in the first quarter was adversely affected by increased promotional incentives and a decline in average vehicle selling prices, but it was still better than expected. He noted, "Operating expenses have increased due to investments in AI and other R&D projects."

As of the time of publication, Tesla's stock rose over 7% before the market opened, reaching $256.31