Tesla (TSLA) is near the last step of the design cycle for its AI5 chip. The company also has early work in place for a new AI6 chip that will run in its cars and its data centers. Elon Musk shared the update in a post on X and said the goal is to place a new chip design in full output each year. The current version in cars is AI4. AI5 is almost ready for tape out, and AI6 is now in the first plan stage.
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Samsung Electronics (SSNLF) won a pact in July to build these chips for Tesla. The deal is worth $16.5 billion, and a new plant in Texas will take on the work for the AI6 part. Musk said that Tesla aims to build more AI chips in the long run than all other groups in the field. He also said the team has high faith in the scale of its plan.
Meanwhile, TSLA shares dropped 1.05% on Friday, closing at $391.09.
Market Action and Retail Flow
In other news, Tesla shares had a sharp turn last week. The price rose by about 4% to an early high of $428.94 but lost pace as the day went on. The stock then closed at $395.04, about 2% lower for the day. This move occurred while the broader tech space saw a mild lift in the same stretch.
Retail traders have bought each pullback in Tesla this year. Even so, the fast shifts in the stock have made that habit tough to follow. A note from JPMorgan (JPM) said these shifts have raised the speed of each rise and fall. The group also said the trend is still in place since Tesla remains one of the most active stocks for that crowd.
Tesla has lost just over 3% this year, while other giant tech firms like Amazon (AMZN), Microsoft (MSFT), and Meta Platforms (META) have kept a strong pace in AI spend. The calm gain for Tesla shows that traders are split on how soon new chip work and self-driving tech will help profit.
Growth Hopes and Valuation
There is still widespread talk that the chip plan could set up new growth. Even so, the path is long. Tesla trades at about 180 times its 2026 profit view. That price level shows that many investors still see substantial gain from AI and self-driving work, yet the timeline is not short. Some analysts warn that more chip output in the next few years could weigh on gains if the field has more supply than is needed.
For now, Tesla remains a key name in the retail crowd and a hot spot in the AI theme. The new chip plan adds to that view. Yet the stock’s near-term track will still hinge on swings in demand, the pace of its chip rollout, and how fast the self-driving unit can scale in real use.
Is TSLA Stock a Buy, Hold, or Sell?
Tesla continues to split the Street’s analysts’ views with a Hold consensus rating. Out of 34 ratings, 14 analysts rate the stock a Buy, while ten analysts rate it a Hold, and another ten rate it a Sell. The average TSLA stock price target is $383.37, suggesting a 1.97% downside from the current price.
