Welsh First Minister Mark Drakeford offered Labour a glimmer of hope as his party looked on course to retain control of the Welsh Government.
Mr Drakeford praised “an extraordinary set of results in extraordinary times” as he increased his own majority by a whopping 10,000 votes.
He said he had encountered “real enthusiasm” on doorsteps – despite polling earlier in the election campaign suggesting the party faced its worst-ever performance.
By 10pm on Friday, Labour had claimed 26 seats in the 60-seat chamber – just five short of a majority – to the Tories’ eight and Plaid Cymru’s five.
The party lost just one of Wales’ red wall seats, the Vale of Clwyd, to the Welsh Tories and retook Rhondda from Plaid Cymru’s former leader Leanne Wood.
Plaid has taken five seats so far, while the Tories boosted their numbers to 8 after winning two new seats.
The voting system for Senedd elections makes it difficult for one party to win an outright majority.
But Labour hailed a “remarkable turnaround” on Friday evening as it edged closer to a majority.
A spokesperson said: “It is increasingly clear that people across Wales have put their faith in Welsh Labour and Mark Drakeford to lead the next Welsh Government and lead Wales out of the pandemic.”
Mr Drakeford, who has won plaudits for his handling of the coronavirus crisis, said he will wait until all Senedd election results are in on Saturday before he considers forming a new administration.
He said: “No party has ever won a majority in the Senedd. It’s very hard to find those extra couple of seats.
“But we will be far closer to it than I think anybody imagined we would be.
“I will want to sit down tomorrow when we have a full suite of results in front of us to think about how we can achieve what we need here in Wales, which is a stable and progressive government.”
“I started this campaign answering questions as to why this was going to be Labour’s worst-ever result – a poll prediction of 22 seats.
Mr Drakeford held his Cardiff West seat with a 11,210 majority compared to 1,176 in 2016.
The final make-up of the next Senedd will not be come until tomorrow with final regional results expected on Saturday afternoon.
It comes after a grim day for Keir Starmer in England as the Tories sensationally won the key Hartlepool by-election and snatched councils from Labour.