The stock market lost ground on Tuesday morning, as investors reacted negatively to news that the COVID-19 outbreak would hurt revenue at the world's largest tech company. That warning made market participants focus again on the potential consequences of the epidemic on the global economy, and even though most anticipate only a temporary pause in economic growth, it's coming at a critical time. As of 11 a.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) was down 166 points to 29,232. The S&P 500 (SNPINDEX:^GSPC) lost 11 points to 3,369, and the Nasdaq Composite (NASDAQINDEX:^IXIC) fell 12 points to 9,720.

Yet many stocks defied the downward trend in the broader market to gain ground. Tesla (NASDAQ:TSLA) returned to its winning ways with another big jump, and many are looking at the electric-vehicle stock with newfound optimism. Meanwhile, Kroger (NYSE:KR) also got a nice boost as one of the world's favorite investors picked the stock to add to his portfolio.

Shopping cart in a grocery store aisle.

Image source: Getty Images.

No limits for Tesla

Shares of Tesla were up 6% Tuesday morning, regaining positive momentum in the stock's turbulent ride recently. The electric-vehicle maker has left many Wall Street analysts looking like they're behind the curve, and prominent players in the professional stock-picking industry are scurrying to catch up.

Analysts at Morgan Stanley, which have long held somewhat bearish views on the car stock, conceded defeat with at least a partial reversal of their previous views. The Wall Street company's official "bull case" price target on Tesla shares got a boost from $650 per share to $1,200. That optimistic assessment includes steady growth in auto production over the next 10 years along with steady increases in margin. Yet Morgan Stanley still posted a more neutral view with its separate base price target of $500 per share. Although that's up from $360, it's still well below the current share price. Similarly, Bernstein more than doubled its price target on Tesla stock from $325 to $730 per share, but the analyst still felt somewhat uneasy in trying to justify the high stock price.

Meanwhile, Tesla is getting some interest from institutional investors. The Renaissance Technologies hedge fund, led by billionaire Jim Simons, filed its quarterly disclosures that included substantial new holdings of Tesla shares. The fund has already seen gains of hundreds of millions of dollars on its holdings if it held on to its shares since Dec. 31, and could continue to benefit from future moves.

Tesla is getting huge amounts of attention, and shareholders can expect the stock price to remain volatile. It'll take time for the company to prove its fundamental strength, and in the meantime, there'll continue to be extensive debate about whether the good times can last.

Buffett buys Kroger stock

Shares of Kroger also gained ground, rising 7% Tuesday morning. The grocery store chain got a big vote of confidence from an unexpected source: Warren Buffett.

The Buffett-led insurance giant Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) revealed in its quarterly disclosures that it had purchased a 2.4% stake in Kroger as of Dec. 31. The addition raised speculation among investors that the move might be just the beginning of a bigger investment in the grocery company, which has seen its stock rebound sharply over the past six months after having dropped to multiyear lows.

Kroger faces plenty of competition, not only from its traditional grocery peers but also from online food-delivery providers. Yet Kroger has been able to fight back with its own initiatives, offering customers various pickup and delivery options to keep up with the pace of innovation elsewhere.

Despite the positive response in Kroger's stock, it's important to remember that with an investment of just $500 million or so, Berkshire didn't really tap into its cash reserve significantly to add the position. As it gets harder and harder to find good values in the stock market, Buffett will have to keep searching to put his available capital to work.