Tesla's Stock Had One of Its Best Days in Months. Here's Why It Popped

• Tesla shares popped Wednesday after CEO Elon Musk touted advances in the company’s latest chips on social media.

• Musk has previously suggested the chips will be critical to supporting Tesla’s autonomous vehicles, robots, and data centers.

It’s been a while since investors got this excited about one of Elon Musk‘s social media posts.

Shares of Tesla (TSLA) popped nearly 8% Wednesday—it was one of the S&P 500’s best performers on a good day for markets—after CEO Elon Musk touted advances in the company’s latest chips on social media. It was the best day for the electric vehicle maker’s stock since last June, when the company started testing its robotaxi service in Austin, Texas.

In the post, Musk congratulated his team on reaching the last step before mass production of Tesla’s AI5 chip and said there are more “other exciting chips” on the way. The AI5 chip is expected to be used for AI applications in Tesla vehicles, Optimus humanoid robots, and data centers.

Back in January, Musk had told investors during the company’s fourth-quarter earnings call that he viewed completing the AI5 chip as “arguably the number one most critical thing to get done” and that he was “spending more time on that than currently anything else at Tesla,” according to a transcript provided by AlphaSense.

Musk has suggested that the AI5 could be “40 times better” than its predecessor, the AI4, and that developing its new chips will be key to supporting the company’s future lines of business focused on physical AI—that is, AI that powers products and services used in the physical world.

The stock has climbed over the past week, with shares up some 13% since chipmaker Intel (INTC) said last Tuesday that it would join plans for a terafab in Austin to help Musk’s Tesla, SpaceX and xAI meet their chip needs.

Tesla likely also got a boost today from news that analysts at UBS on Monday upgraded the shares to a neutral rating from sell. Their price target, $342, is below the Street’s consensus, according to Visible Alpha data.

Still, the shares are down about 13% for the year so far and 20% off December’s highs.

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