Tesla (TSLA) shares are up more than 6% on Monday after the U.S. and China agreed to temporarily pause most tariffs on each other’s imports for 90 days. 

The TSLA share price increase this morning even helped the EV maker reclaim a market cap of more than $1 trillion for the first time since late February. 

Including today’s gain, Tesla stock is up 45% versus its year-to-date low. 

Why Is the Tariff Reprieve So Meaningful for Tesla Stock?

A deescalation of trade tensions between Washington and Beijing is meaningful for Tesla as China continues to be a key market for the Nasdaq-listed firm. 

In 2024, the electric vehicle behemoth attributed about 22% of its overall revenue to China. Plus, its most productive factory is located in Shanghai as well. 

Investors are cheering the trade deal also because tariffs could have made Tesla vehicles more expensive, making it incrementally more difficult for the electric vehicle behemoth to go up against its Chinese rivals like BYD (BYDDY). 

Cathie Wood Remains Uber Bullish on TSLA Shares

Tesla stock has struggled this year amidst concerns of a demand slowdown and damage to the brand’s reputation due to Musk’s role in politics. 

Still, the founder and chief executive of Ark Invest – Cathie Wood – continues to see TSLA share price hitting $2,600 by the end of this decade. 

Wood expects commercialization of robotaxis that Tesla will likely commence in the coming months to unlock significant further upside in the EV stock.

The famed investor also sees humanoid robots as a massive long-term tailwind for Tesla shares. In fact, she dubbed that market a $26 trillion revenue opportunity for the Austin headquartered firm in her recent interview with CNBC.  

All in all, Cathie Wood sees TSLA as the best AI stock to own in 2025. 

Wall Street Disagrees with Cathie Wood on Tesla

Investors should note, however, that Wall Street doesn’t agree with Cathie Wood on Tesla stock despite a temporary trade deal between the U.S. and China over the weekend. 

The consensus rating on TSLA remains at “Hold” only with the mean target of $283 suggesting potential downside of more than 10% from current levels.