Tesla stock spikes as investors cheer Musk's plan to step back from politics

• Tesla shares jumped Wednesday as CEO Elon Musk announced plans to step back from politics.
• Investors have been waiting anxiously for Musk to refocus his attention on the firm.
• Musk's pivot from DOGE drove the stock higher despite dismal quarterly earnings.

The move: Tesla stock jumped as much as 7% on Wednesday, to an intraday high of $255.18 per share. The electric-vehicle maker is down 39% year-to-date.

The chart:

Why: The sharp rally was triggered after CEO Elon Musk announced plans to step away from his role with the White House Department of Government Efficiency, encouraging investors who have complained about his divided attention.

Musk, who has led DOGE under the Trump administration for the past three months, announced Tuesday that he would be allocating "far more time" to Tesla during the company's earnings call.

Despite the weak earnings, Musk's comments delivered exactly the kind of news shareholders have been clamoring for. Investors have grown irate with Musk's absence amid a flurry of Tesla headwinds this year that have slashed about 40% from the stock price year-to-date. Prominent bulls have worried that his DOGE involvement was transforming the carmaker into a political brand.

What it means: Musk's renewed focus on the company could ease some of the big challenges facing the company, while rekindling investors' faith.

Still, Tesla has other issues that pose a risk to the stock price.

Shares are rising despite downbeat first-quarter earnings results. The firm reported revenue of $19.34 billion, missing the estimated $21.43 billion.

Meanwhile, earnings per share were down 71% year-over-year at 12 cents per share, underwhelming forecasts of 33 cents per share.

What the pros are saying: While Wedbush Securities analyst Dan Ives saw this as a "disaster quarter," Musk's announcement was exactly what needed to happen, he wrote in a note.

"The brand damage caused by Musk in the White House/DOGE over the past few months will not go away just by this move and some of the damage will be stained forever in Europe and the US (~10% future demand destruction we estimate)," he wrote in a note.

"But this was the time to close one dark chapter and open a brighter one for the Tesla story with autonomous and robotics front and center."

Bank of America said it's encouraged by Tesla's Robotaxi project and its affordable vehicle line-up. Otherwise, tariffs remain a challenging overhang for the vehicle maker, other analysts said Wednesday.