Tesla Surges 2.26%—What’s Fueling the Rally Amid Dojo Scrapping Drama?

Summary
• Tesla (TSLA) trades at $329.57, up 2.26% intraday, hitting a high of $334.99
• Elon Musk’s shift to Nvidia/AMD chips and Samsung manufacturing sparks market speculation
• Leveraged ETFs like ELON and TSLG surge 4.3%–5.4% as retail traders bet on momentum

Tesla’s stock is surging amid a seismic shift in its AI strategy, with the scrapping of the Dojo supercomputer project sending ripples through the tech and automotive sectors. The stock’s 2.26% gain has outpaced its sector peers, despite a Zacks Rank 4 (Sell) rating. With options volume spiking and leveraged ETFs amplifying volatility, the question looms: Is this a short-covering rally or a pivot toward a new era of chip partnerships?

Dojo’s Demise and Chip Alliances Ignite Speculation
Tesla’s intraday rally is directly tied to the abrupt cancellation of its Dojo supercomputer project, as reported by multiple outlets. CEO Elon Musk’s pivot to leveraging Nvidia (NVDA) and AMD (AMD) for compute chips, alongside Samsung for manufacturing, has recalibrated market expectations. While the Dojo project was once projected to add half a trillion dollars in value to Tesla, its dissolution has sparked a mix of short-term volatility and long-term uncertainty. Zacks highlights that Tesla’s earnings estimates have declined by 31.4% year-over-year, yet the stock’s technicals suggest a short-term rebound, with bulls capitalizing on the shift to external chip partnerships as a potential cost-cutting play.

Automotive Sector Flat as Ford Trails
Options and ETFs to Watch: Capitalizing on Volatility
• 200-day average: 323.49 (above) • RSI: 46.17 (neutral) • MACD: -0.83 (bearish) • Bollinger Bands: 300.43–335.90 • Gamma: 0.018–0.021 (high sensitivity)

Tesla’s technicals suggest a short-term bullish bias, with the 330–335 range acting as a critical resistance cluster. The 200-day MA at 323.49 offers a baseline for support, while the RSI’s 46.17 indicates room for upward momentum. Leveraged ETFs like TSLG (up 4.66%) and TSLR (up 4.46%) are amplifying retail participation, but options traders are eyeing the August 15 expiration cycle for high-conviction plays.

• TSLA20250815C330 (Call, $330 strike, 8/15 expiry): IV 39.36%, Leverage 43.26%, Delta 0.5099, Theta -1.327, Gamma 0.0208, Turnover $32.9M. This contract balances moderate delta with high gamma, ideal for a 5% upside scenario (target price $346.05).
• TSLA20250815C332.5 (Call, $332.5 strike, 8/15 expiry): IV 39.47%, Leverage 50.79%, Delta 0.4585, Theta -1.242, Gamma 0.0206, Turnover $13.3M. High leverage and liquidity make this a top pick for aggressive bulls, with a 5% upside payoff of $354.11.

Aggressive bulls should consider TSLA20250815C330 into a break above $335, while TSLA20250815C332.5 offers a high-reward path if the stock holds above $327.50.

Backtest Tesla Stock Performance
Following a 2% intraday increase, Tesla (TSLA) experienced significant performance gains, with a strategy that captured 179.84% returns over five years, versus a benchmark return of 84.64%, delivering a 95.20% excess return. The strategy had a maximum drawdown of 0%, a Sharpe ratio of 0.35, and a volatility of 66.36%, indicating robust risk-adjusted performance.

Tesla’s Rally: A Short-Term Play or Strategic Shift?
Tesla’s 2.26% intraday gain reflects a mix of short-term optimism and strategic recalibration, but the Zacks Rank 4 (Sell) and declining earnings estimates suggest caution. The stock’s 330–335 resistance cluster and 325–330 support zone will be critical in the coming days. With Ford (F) up just 0.01% and the sector showing no clear leadership, Tesla’s move appears decoupled from broader automotive trends. Traders should monitor the 330 level for a potential breakout or breakdown, while leveraged ETFs like TSLG and TSLR offer amplified exposure to near-term volatility. For now, the Dojo scrapping and chip partnerships have created a narrative-driven rally—watch for follow-through volume to confirm sustainability.