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Tesla stock rose about 1% early Monday, 23 March 2026, to trade near $371, after the company formally announced plans to build a semiconductor factory in partnership with SpaceX and xAI. The electric-vehicle giant’s shares lagged broader market gains, even as sentiment improved following easing geopolitical tensions.
Investors appeared cautious about the scale and execution risks tied to the ambitious chip manufacturing push. Market participants balanced Tesla’s long-term artificial intelligence opportunity against the significant financial commitment required for the project.
Elon Musk’s companies unveiled the new semiconductor initiative, dubbed ‘Terafab,’ during an event in Austin, Texas, over the weekend. The facility aims to produce up to one terawatt of computing capacity annually; a level Tesla claims would double current US computing consumption.
The chips will power Tesla’s expanding AI ambitions, including its Full Self-Driving software rollout, robotaxi program, and Optimus humanoid robots. Collaboration with SpaceX and xAI, which are moving toward operational integration, could help distribute costs and accelerate development timelines.
The project is estimated to call for an investment of around $25 billion, which would put Musk’s ecosystem in a position to compete with chipmakers like Samsung Electronics and Taiwan Semiconductor Manufacturing in developing advanced chips.
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Although Tesla’s shares rose early in the week, they are continuing to face pressure due to technical weakness. Last week, Tesla’s shares fell 5.9% to 367.96. This was after they fell below the 200-day moving average for the first time in months. The shares fell to an intraday low of 364.96 on Friday, 20 March 2026. This was after they retraced most of the 36% gain experienced since September 2025.
Tesla’s shares are down by around 20% so far in 2026. They are also more than 25% away from the December 2025 high of 498.83. The Terafab project is seen as a way to further support Tesla’s narrative around AI in the long term.
