Are investors ‘finally realizing’ that it’s an AI firm? One analyst thinks so.

One reason Tesla’s (TSLA) stock is soaring? Investors, one analyst contends, are viewing the company as a safe bet on AI technology.

“It’s kind of like the markets are finally realizing the full value of the software that they’ve been developing for a long time that a lot of people have been saying is going to be incredibly valuable,” Gerber Kawasaki Wealth & Investment Management CEO Ross Gerber told Yahoo Finance Live (video above).

Tesla’s stock opened at $260 on Tuesday, the highest since September. In the past two weeks alone, Tesla is up a healthy 12%.

For years, Tesla and its CEO Elon Musk have said AI, which is at the center of the firm’s self-driving software tech, is one big reason to pay attention to the EV company. That drum keeps beating. For example: Last September, the company held an “AI Day” where execs spoke about the self-driving Autopilot software, a prototype robot named Optimus, and its high-performance Dojo hardware, which has the capability to train Tesla’s AI on videos filmed by the vehicles.

Also fueling the Tesla AI hype is a new wave of excitement about the company’s robotaxi concept, a potential ride-sharing service that relies on autonomous driving technology. Tom Narayan, lead equity analyst, global autos at RBC Capital Markets told Yahoo Finance Live last week that robotaxis could make up 70% of Tesla’s future value.

“It’s really nice that everybody’s into AI, but this has been going on for a long time,” Gerber said of Tesla’s push into the AI conversation.

That said, there are still some serious challenges ahead: Tesla’s Autopilot has been involved in hundreds of crashes, demonstrating that the technology is not yet perfect and there may be a few bumps in the road ahead.

That aside, Gerber said he is seeing other signs of optimism when it comes to Tesla’s stock. Gerber – who criticized Musk in recent months for his role at Twitter – said “institutional investors” have returned since Musk stepped down as CEO of the social network a month ago and increased his focus on Tesla.

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More good news: Tesla is signing on new partners to its Supercharger network across the United States and Canada. Rivian (RIVN) joined on Tuesday, following Ford (F) and GM (GM) in expanding the number of EVs that can use Tesla’s chargers. Tesla’s partnerships with competitors will increase its control over the business of EV charging—another plus for shareholders.

“We just have seen full fledge how Elon’s focus makes such a huge difference in the results,” Gerber said. “The stock market has responded, and institutional investors have come back into the stock, and now we’re back to the valuation that Tesla deserves.”

Jared Mitovich is a writer at Yahoo Finance. Follow him on Twitter @jmitovich

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