GoKawiilTesla stock closed nearly 8% higher on Wednesday at $391.95 per share after CEO Elon Musk touted progress on the company's forthcoming AI5 chip.
Musk said in a post on his social network X that the chip has reached a key engineering milestone and is getting closer to production.
Tesla is also planning to build two advanced chip factories in Austin, Texas, in partnership with SpaceX — one to make chips for vehicles and robots, and another to produce chips for use in orbital data centers.
Intel recently joined the Tesla-SpaceX Terafab project.
UBS analysts upgraded their rating on the stock from sell to hold on Tuesday, and increased their price target by about a dollar to $352. The stock gained just over 3% on Tuesday and has rallied more than 12% so far this week.
Flipping from a previously bearish outlook, UBS analysts led by Joseph Spak wrote in their upgrade that news that Tesla is working on a new, smaller SUV is a "welcome development," given the firm's view that Tesla's current light-duty vehicle offerings are "too limited."