TradingKey - Tesla to Build Chip Factory with SpaceX; Why Did the Stock Price Fall Instead of Rise?

On March 24, Eastern Time, Elon Musk announced that Tesla ( TSLA) will build a massive chip factory with SpaceX, but Tesla's stock price fell instead of rising. In U.S. pre-market trading, Tesla shares fell 0.7%, trading at $378.2.

Tesla stock price chart, Source: Google

According to reports on March 24, Musk revealed that Tesla and SpaceX will construct a large-scale chip factory named 'Terafab' in Austin to meet surging AI demand. The factory reportedly aims to produce 1 terawatt of computing power per year, exceeding the current total capacity of the United States.

Amid the AI boom, Tesla's entry into AI chips is a major positive; however, the stock price fell instead of rising, primarily weighed down by market panic. As of press time, the VIX volatility index rose 3.65%, and the three major U.S. stock index futures fell collectively. Dow Jones futures dropped 0.63%, S&P 500 futures fell 0.59%, and Nasdaq futures declined 0.57%.

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