By Tesla stock TSLA rose on Friday as investors assessed Elon Musk’s plans for a major semiconductor project, improving sales of China-made vehicles and analysts’ expectations for the company’s artificial intelligence ambitions.
Shares of the electric-vehicle maker gained 2.24% in the session. The stock’s advance came as Musk clarified that Tesla and SpaceX would own and operate Terafab, a proposed chip manufacturing facility in Texas.
Tesla shares also received support from a positive analyst assessment ahead of the company’s third-quarter earnings report, scheduled for October 21.
Musk clarifies Tesla and SpaceX’s role in Terafab
Terafab is central to Musk’s efforts to expand semiconductor capacity for artificial intelligence applications.
The project is intended to address what Musk considers a key constraint on AI growth: the availability of chips.
Musk said earlier this week on X that Tesla and SpaceX would own and operate the facility, while other companies, including Taiwan Semiconductor Manufacturing, could lease space if they wanted to.
The initial phase is expected to cost between $10 billion and $20 billion, shared by Tesla and SpaceX. The broader project could eventually cost more than $100 billion.
Musk has outlined plans for a facility spanning 100 million square feet, incorporating chip manufacturing, advanced packaging, assembly, and testing.
That would make it 10 times the size of Tesla’s electric-vehicle factory in Austin, Texas, and 30 times the size of Taiwan Semiconductor Manufacturing’s current Arizona chip facility.
Intel and Taiwan Semiconductor Manufacturing are assisting Musk’s companies with the project. Investors may receive further details about Terafab when Tesla releases its quarterly results.
China sales improve as Tesla awaits earnings
Tesla’s China-made vehicle sales increased in September, extending a run of year-over-year gains to 11 months.
Deliveries of Model 3 and Model Y vehicles produced at the company’s Shanghai factory, including those shipped overseas, rose 5% from a year earlier to 95,366 units, according to China Passenger Car Association data released on Friday. Sales had increased 3.6% in August.
Shipments of Shanghai-built vehicles grew 13.7% year over year in the third quarter, based on Reuters calculations using the industry data.
However, Tesla’s global deliveries declined 2.1% from a year earlier, against a record in the third quarter of 2025.
The company’s latest global delivery figure nevertheless exceeded forecasts, keeping it on track to return to annual growth after two consecutive years of declines.
Tesla also recorded an increase in new-vehicle registrations across several European markets in September, extending its recovery in the region.
In China, the company is offering discounts on selected Model Y variants through October, including a 7,000-yuan ($1,044) reduction on final payments.
Buyers of all Model 3 variants can receive discounts of 5,000 yuan over the same period, as competition in the market remains intense.
Wall Street expects Tesla to report earnings per share of 45 cents on revenue of $28.3 billion for the third quarter.
In the year-earlier period, the company reported earnings per share of 50 cents on revenue of $28.1 billion.
Analysts focus on AI, autonomy and robotics
Tigress Financial analyst Ivan Feinseth reiterated a Buy rating and a $550 price target ahead of the earnings announcement, according to ratings aggregators.
Feinseth is optimistic about Tesla’s artificial intelligence initiatives, including robotaxis, humanoid robots and its Full Self-Driving driver-assistance product, which costs customers $99 a month.
Yorkville Ives analyst Dan Ives also sees autonomy and robotics as important to Tesla’s longer-term prospects.
He maintained an Outperform rating and a $500 price target, arguing that the company is evolving into a “physical AI” platform spanning vehicles, autonomous driving, humanoid robots and energy storage.
Ives’ assessment places emphasis on the potential for software and services to generate revenue alongside Tesla’s vehicle business.
Turning those ambitions into recurring revenue will be important to the case supporting his price target.
For investors, Tesla’s upcoming results could provide an opportunity to assess vehicle demand alongside the company’s plans for AI infrastructure and other businesses.
The outlook will depend not only on sales of its existing vehicles but also on how its longer-term technology initiatives develop.
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