Why Tesla Stock Jumped 6.8% Today

Shares of Tesla Inc (NASDAQ: TSLA) jumped on Monday, finishing up 6.8%. The rise came as the S&P 500 and the Nasdaq Composite gained 1.5% and 2.6%, respectively.

Tweets from Tesla chief Elon Musk on Sunday sent the stock flying amid a broader market rally.

Tesla makes chips, too

On Sunday, Musk took to X to talk up his company's artificial intelligence (AI) chip business, saying, "Most people don't know that Tesla has had an advanced AI chip and board engineering team for many years." According to Musk, the team has already "designed and deployed several million AI chips" in Tesla vehicles and data centers, and that the chips would "profoundly change the world in positive ways."

He added that the company would match AI chip giant Nvidia's update cadence, bringing a new chip to "volume production" every 12 months in order to fulfill the company's self-driving and humanoid robot ambitions.

Image source: Getty Images.

Tesla is still overvalued

Grand visions of the future are exciting, but the reality is that, at present, Tesla is not a robot company; it is a carmaker and battery technology company. The stock's current price, north of $400, is built on speculation and the narratives that Musk's tweets help sell. It makes no sense in relation to the numbers the company is actually reporting.

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Tesla. The Motley Fool has a disclosure policy.