Tesla's stock climbed roughly 3% to $321.65 in midday trading on Monday, marking a third consecutive daily advance and continuing its recovery from a steep post-earnings decline. The broader market also rallied, with the S&P 500 up 1% and the Dow Jones Industrial Average adding 1.2%.
The rebound follows a turbulent period for the electric-vehicle maker, which saw its shares plunge more than 20% after reporting weaker-than-expected second-quarter results on July 22. Last week, the stock closed below $300 for the first time in over a year, capping a six-session losing streak.
In its latest quarterly report, Tesla posted operating profit of roughly $400 million—about $1.3 billion below Wall Street estimates—while offering limited new details on its artificial intelligence initiatives, including robotaxis and the Optimus humanoid robot. Despite the earnings miss, some analysts remain focused on the company's long-term AI potential.
European registrations show mixed signals
Data released Monday painted a mixed picture for Tesla's European sales in July. Registrations surged 86% year over year in France and 52% in Denmark, according to French automotive body PFA and Denmark's bilstatistik.dk. However, declines were recorded in Norway, Sweden, and Spain.
Tesla's European sales have rebounded in 2026 after two consecutive annual drops, supported by easier year-over-year comparisons, higher fuel prices, government incentives, and stronger consumer demand for electric vehicles. The mixed July figures suggest the recovery remains uneven across the region.
NHTSA opens preliminary investigation
Investor sentiment appeared largely unaffected by news that the National Highway Traffic Safety Administration (NHTSA) opened a preliminary investigation into approximately 1.2 million Tesla vehicles over reports of suspension failures. The agency's Office of Defects Investigation received 156 complaints alleging that the front lower lateral link detached on certain 2018-2020 Model 3 and 2021-2023 Model Y vehicles, potentially causing a loss of steering control.
According to NHTSA, the reported failures could leave vehicles undrivable and require towing. Most complaints indicated no advance warning before the failure, though some owners reported hearing noises beforehand. The regulator said it was not aware of any crashes, injuries, or fatalities linked to the issue. This investigation is the first stage of the agency's defect review process and could ultimately lead to a recall if a safety-related defect is identified.
Stifel remains bullish on AI-driven value
Despite near-term regulatory concerns, several Wall Street firms continue to emphasize Tesla's longer-term AI strategy. Following the second-quarter results, Stifel lowered its price target on the stock to $491 from $508 while maintaining a Buy rating. The brokerage highlighted progress in Full Self-Driving and robotaxi development as key long-term value drivers.
Stifel also pointed to Tesla's largest order backlog since 2023 and the launch of the Model YL as signs that vehicle demand is improving. The firm's valuation is based on a sum-of-the-parts analysis, with adoption of Full Self-Driving technology and the commercial success of robotaxis identified as the biggest factors that could influence its investment thesis.
For investors tracking Tesla's trajectory, the stock's recent volatility underscores the tension between near-term operational challenges and long-term AI ambitions. As the company navigates regulatory scrutiny and mixed regional sales, its ability to execute on autonomy and robotaxi initiatives will likely remain central to its valuation. For more context, see our analysis of Tesla's AI ambitions and price targets and the broader AI spending surge's impact on markets.
This article is for informational purposes only and does not constitute financial advice.
