Al Root

Tesla stock rose in April. Don't call it the start of a rally. Shares remain stuck for a very obvious reason.

Shares of the electric vehicle maker were essentially flat in premarket trading at $381.69, while S&P 500 and Dow Jones Industrial Average futures were up 0.1% and 0.2%, respectively.

The move comes after Tesla stock gained 2.7% in April, its first positive month for 2026.

That isn't much to get excited about. Coming into Friday trading, shares were down 15% year to date after falling for 13 of the past 17 weeks.

The reason isn't hard to suss out. It's AI. Investors have lofty expectations for Tesla's plans to populate the world with "physical AI" applications such as robo-taxis and robots. Its shares trade for about 180 times earnings expected over the coming 12 months.

AI progress, however, has been painfully slow in 2026. Tesla launched its robo-taxi service in Austin, Texas, in June with a handful of cars and safety monitors in the front passenger seat. Tesla has expanded paid rides to Dallas and Houston, but it's still a far cry from CEO Elon Musk's near-term goal of operating in dozens of cities, covering half the U.S. population.

As for robots, Tesla decided not to show off the latest generation of its humanoid, Optimus, in the first quarter, citing competitive threats. Still, investors would like a way to follow Tesla's progress on its robots. (Musk says robots will be the largest product in human history.)

Couple the slow progress with poor cash flow, and you have a recipe for a weak stock. Tesla plans to spend $25 billion on new plants and equipment, up from less than $9 billion in 2025. Wall Street projects cash use of $9 billion this year, down from about $6 billion in free cash flow in 2025.

Tesla's AI dreams are still baking in the oven, leaving investors waiting. Investors hate waiting.

Write to Al Root at allen.root@dowjones.com

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(END) Dow Jones Newswires

May 01, 2026 07:44 ET (11:44 GMT)

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