Tesla stock jumps 8% on AI chip milestone announcement

Investing.com -- Tesla (NASDAQ: TSLA) shares rose as much as 8% on Wednesday after Chief Executive Elon Musk announced the company’s chip design team completed the "tape out" of its AI5 chip.

The electric vehicle maker was the best performer among the Magnificent Seven technology stocks following Musk’s announcement on X. "Congrats to the @Tesla_AI chip design team on taping out AI5! AI6, Dojo3 & other exciting chips in work," Musk wrote.

A tape out refers to the final stage of chip design before manufacturing begins, marking the completion of the design process and readiness for production.

The gains came amid broader strength in technology stocks. Microsoft (NASDAQ: MSFT) followed Tesla with a 3.7% gain. Both stocks have been relative laggards this year.

Tesla is scheduled to report its first quarter 2026 financial results and provide an update to investors next Wednesday.

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