Tesla Stock Rises for 5th Straight Day as Elon Musk Threatens Legal Action Against Apple

Tesla CEO Elon Musk isn’t pleased with Apple’s App Store. Apparently, he believes XAI apps X and Grok should be more popular. (Omar Marques/Getty Images)

Tesla stock just notched its fifth straight day of gains. Shares overcame a brewing controversy between CEO Elon Musk and Apple on Tuesday to end the day 0.5% higher.

The electric-vehicle maker’s stock closed at $340.84, while the S&P 500 and Dow Jones Industrial Average rose 1.1%.

The move came as Musk threatened legal action against Apple on Monday, alleging it was illegally stifling competition in its app store. “Apple didn’t just put their thumb on the scale, they put their whole body!” Musk said on social media.

The battle brewing is essentially between Musk’s artificial-intelligence company xAI and Apple, not Tesla and Apple. xAI has apps for X and Grok in the App Store.

“The App Store is designed to be fair and free of bias,” said Apple in an emailed statement. “We feature thousands of apps through charts, algorithmic recommendations, and curated lists selected by experts using objective criteria. Our goal is to offer safe discovery for users and valuable opportunities for developers, collaborating with many to increase app visibility in rapidly evolving categories.”

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OpenAI CEO Sam Altman responded to Musk on X, saying “this is a remarkable claim given what I have heard alleged that Elon does to manipulate X to benefit himself and his own companies and harm his competitors and people he doesn’t like.”

Because of the dispute, xAI has become a watch item for Tesla investors. Musk has suggested that Tesla take a stake in the company, and the lines between Tesla and xAI have blurred in recent months. Both need to attract top talent to develop useful AI applications.

Coming into Tuesday trading, Tesla stock has risen for four consecutive trading days, adding almost $31, or 10% to the stock price. It’s difficult to identify one reason for the rally. There are a few things that might have helped.

For starters, stocks in general were up. The Nasdaq Composite added more than 2% over that span, setting a record on Friday. Tesla’s board also recently announced a new pay package for CEO Elon Musk, helping to remove some doubts about where Musk will be focusing his efforts in the coming years. And wait times for Tesla vehicles in the U.S. are lengthening as buyers look to purchase before the expiration of the $7,500 federal tax credits in September.

The stock has also recaptured some lost momentum it had in the run-up to the company’s robo-taxi service launch on June 22. Shares were above $340 before the launch, and getting back close to those levels has made the stock more attractive to technical traders.

Coming into Tuesday trading, Tesla stock was down about 16% year to date, but up about 72% over the past 12 months.

Meanwhile, Apple stock is down 8.7% this year and up 3.4% over the last 12 months. Concerns about lagging AI tech and the potential impacts from tariffs have weighed heavily on the shares. There are also ongoing regulatory concerns, and Musk’s lawsuit against Apple would be another in the list of antitrust cases that Big Tech is currently facing.

A federal judge ruled in August 2024 that Alphabet’s Google had a monopoly in general search services and general text advertising. That judge is expected to put remedies in place that will end the Google monopoly. One would include banning exclusive search-engine agreements with companies such as Apple. Wall Street is waiting to hear if the agreement between Apple and Google will be forced to end. That would be a problem for the iPhone maker, as Google paid Apple $20 billion in 2022, according to trial testimony.

Apple was also sued by the Department of Justice in 2024 for allegedly monopolizing smartphone markets.

Write to Al Root at allen.root@dowjones.com and Angela Palumbo at angela.palumbo@dowjones.com