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Forbes
Forbes
29 Apr 2024


Tesla shares skyrocketed again Monday thanks to optimism about its prospects in the key China market, handsomely swelling the holdings of the electric vehicle firm’s CEO and largest individual shareholder Elon Musk, as Musk and company look to reverse Tesla’s challenging start to the year.

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Elon Musk has grown a much richer man over the last week as investors pile back into Tesla.

Getty Images

Tesla stock surged 12% to $189 per share shortly after market open, tacking on a cool $65 billion in market value and hitting its highest intraday level since March 4.

The rally came after Musk took a surprise trip to China over the weekend, a jaunt concluding with a reported agreement for Tesla to link up with Chinese internet dominator Baidu to soon bring its semi-autonomous driving technology to Chinese roads.

Bringing full self-driving to China would be a particularly big win for Tesla as the country accounted for 22.5% of all 2023 revenues for the automaker, with pessimism about Tesla’s dwindling market share in China and slumping demand for electric vehicles broadly in China acting as two of the most important factors driving Tesla stock’s 42% crash from the end of 2023 until Tuesday.

Winning full self-driving approval in China poses a “watershed moment” for Tesla, Wedbush analyst and long-time Tesla bull Dan Ives wrote to clients Monday, noting that despite the Chinese “demand challenges” investors are “looking through this painful transition period for the long term growth story to emerge.”

Musk, whose 13% stake in Tesla accounts for a majority of his net worth, enjoyed an $11 billion bump to his fortune Monday, growing from $191.1 billion to $202 billion, according to Forbes’ calculations. That vaulted Musk above Amazon founder Jeff Bezos, who is worth $202 billion, to become the U.S.’ richest person. Musk is more than $20 billion richer than he was just six days ago.

30%. That’s how much Tesla shares are up since the company reported first-quarter earnings Tuesday afternoon.

The late April rally trimmed Tesla’s year-to-date loss from 42% to 25%, still well below broader indexes’ positive 2024 returns. Despite the renewed optimism surrounding Tesla, the company has plenty of work to do to fully restore investor confidence: Its valuation remains more than 50% below its 2021 peak, and consensus analyst forecasts expect Tesla to first recapture its record 2022 profit in 2026, according to FactSet. Musk emphasized in last week’s earnings call Tesla should be viewed as an artificial intelligence company valued for its long-term growth potential rather than for the fundamentals for its core electric vehicle business. After that, Tesla enjoyed a growing valuation over the last week even after it reported a double-digit annual percentage decline in both its first-quarter sales and profits.