Tesla shares moved lower during Friday's session, slipping 0.4% to $415.51 in morning trade. The decline followed a 2.7% drop on Thursday, despite investment firm Tigress Research initiating coverage with a buy rating and a $550 price target.
Macro Backdrop Offers Mixed Signals
The January Consumer Price Index showed a 0.2% monthly increase and a 2.4% annual rise, slightly below expectations. While this supports arguments for Federal Reserve rate cuts, some analysts cautioned that underlying price pressures could limit the central bank's flexibility.
For high-valuation growth names like Tesla, interest rate expectations directly impact investor calculus. Lower rates typically justify richer multiples, but they don't resolve fundamental questions about the company's ability to convert its ambitious autonomy and robotics projects into consistent profits.
Autonomy Narrative Faces Scrutiny
Tigress framed Tesla's future around a "physical AI growth flywheel" driven by Full Self-Driving subscriptions, robotaxis, and Optimus robots. However, the market remains skeptical about timelines beyond limited pilot programs, especially with increasing regulatory scrutiny and competitive pressure.
Alphabet's Waymo already operates driverless taxis in multiple U.S. cities, while traditional automakers continue investing in advanced driver-assistance systems. A slow autonomy rollout would leave Tesla reliant on its core electric vehicle business amid uncertain demand.
Traders will next examine Federal Reserve minutes from the late January meeting, followed by GDP and personal spending data later in the week. U.S. markets will be closed Monday for the Presidents Day holiday.
