Tesla Just Signed a Chip Supply Deal with Samsung. What Does That Mean for TSLA Stock?

Tesla (TSLA) shares closed higher today after the company announced one of its largest tech partnerships ever with Samsung Electronics. 

The agreement worth an estimated $16.5 billion will see the South Korean giant dedicate its new Texas fab to “making Tesla’s next-generation AI6 chip,” billionaire CEO Elon Musk confirmed in a X post on Monday. 

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Despite today’s gain, Tesla stock is down nearly 12% versus its high set in the final week of May. 

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Significance of Samsung Deal for Tesla stock

The Samsung deal is meaningfully positive for TSLA as it secures long-term access to custom AI chips critical for Full Self-Driving (FSD), robotics, and data center operations. 

Through this deal, Tesla gains supply chain stability and manufacturing oversight as well. 

The AI6 chip will unify the automaker’s hardware across vehicles and robots, boosting efficiency and reducing reliance on Nvidia (NVDA). 

In short, the chip supply agreement is a strategic leap for Tesla’s vertical integration and AI leadership, potentially accelerating product innovation, improving margins, and increasing the TSLA share price over time. 

William Blair Remains Dovish on TSLA Shares 

In a CNBC interview, William Blair analyst Jed Dorsheimer was nothing but positive on the Samsung deal announced today as it reinforces Musk’s commitment to moonshot businesses like robotaxis, humanoid robotics, and AI infrastructure. 

These ventures are broadly expected to drive future value for the Austin-headquartered EV maker. “Most investors want to see Elon do what Elon does best, which is innovate, and this certainly is a data point for that,” he argued. 

Still, the senior William Blair analyst maintained his “Market Perform” rating on Tesla shares citing continued weakness in the company’s core automotive business and the potential impact that the removal of EV tax credits will have on it post-September. 

Wall Street Agrees with William Blair on Tesla

Investors should note that Jed Dorsheimer of William Blair is not the only Wall Street analyst that recommends treading with caution on Tesla stock. 

According to Barchart, the consensus rating on TSLA shares currently sits at “Hold” only with the mean target of about $298 indicating potential downside of about 8% from current levels. 

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On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.