Key Points
Tesla’s stock dropped 4.1% on Tuesday following Nvidia’s announcement of Alpamayo, an AI brain for autonomous vehicles.
Nvidia aims to sell chips and computing tools for self-driving cars, potentially reducing Tesla’s self-driving business opportunities.
Mobileye acquired Mentee, an Israeli AI humanoid robot start-up, for $900 million, intensifying competition in the robotics sector.
Tesla’s stock seemed to settle down after a volatile Tuesday prompted by other companies tryingto elbowin on itsAI opportunity.
Shares of the electric-vehicle maker were up 0.4% at $434.77 in premarket trading Wednesday.
The move comes after a steep 4.1% drop on Tuesday, following Nvidia’s self-driving car announcements. The AI chip maker introduced Alpamayo, which is essentially a brain enabling autonomous vehicles.
Nvidia has been working on self-driving cars for years. It doesn’t want to sell cars, per se. It wants to sell chips and computers for self-driving cars and to have developers use its tools, which include virtual worlds that can train AI-enabled cars to drive.
The potential problem for Tesla is that if anyone can adopt Nvidia’s self-driving technology, there could be less self-driving business for Tesla. That’s a problem because bullish Wall Street analysts value Tesla’s robo-taxi opportunity in the hundreds of billions to trillions.
Tesla is also using AI to develop humanoid robots. Other companies want a piece of that potential business, too. Autonomous driving technology company Mobileye announced the $900 million acquisition of Mentee, an Israeli AI humanoid robot start-up.
“No sooner had Nvidia drawn a straight line between autonomous vehicles and robotics in physical AI Monday evening, [than Mobileye] endorsed the exact same path Tuesday,” wrote Baird analyst Luke Junk in a Wednesday report.
Alphabet’s Waymo and Tesla plan to expand their robo-taxi businesses significantly in 2026. Meaningful sales from humanoid robots are likely years away. Still, Tesla investors want it to get the lion’s share of the business. It won’t be easy, though, with other companies vying for market share.
Coming into Wednesday trading. Tesla stock was up about 10% over the past 12 months, valuing the company at about 200 times estimated 2026 earnings.
