Tesla (TSLA) Stock: The Comeback Story Behind New All-Time Highs

TLDR

• Tesla stock hit a new all-time closing high of $489.88 on Tuesday, up 3.1%, surpassing its previous record from December 2024
• The rally comes after CEO Elon Musk announced Tesla is testing driverless robotaxis in Austin without safety monitors on board
• Mizuho raised its price target to $530 from $475, citing improvements in Full Self-Driving technology and robotaxi expansion potential
• Tesla’s market cap reached $1.63 trillion, making it the seventh-most valuable publicly traded company
• Despite the stock surge, Tesla faces headwinds including November U.S. sales dropping to a four-year low and loss of federal EV tax credits

Tesla shares closed at $489.88 on Tuesday, marking a new all-time high for the electric vehicle maker. The 3.1% jump came as investors rallied around progress in the company’s autonomous driving ambitions.

Tesla, Inc., TSLA

The stock’s climb continues a remarkable comeback after a brutal start to the year. Shares plummeted 36% in the first quarter, marking Tesla’s worst performance since 2022. Now the stock is up 21% for the year.

The latest surge came after CEO Elon Musk revealed Tesla has been testing robotaxis without any occupants on board in Austin, Texas. The tests represent a step forward from the pilot program launched in June, which required safety drivers in the vehicles.

Tesla’s market cap now sits at $1.63 trillion. That makes it the seventh-most valuable publicly traded company, just ahead of Broadcom and trailing Meta.

Musk’s net worth has climbed to about $684 billion, according to Forbes. He leads the second-place billionaire by more than $430 billion.

Price Target Increases Drive Optimism

Mizuho analysts raised their price target on Tesla to $530 from $475 this week. The firm maintained its buy rating on the stock.

Analyst Vijay Rakesh pointed to improvements in Tesla’s Full Self-Driving technology. He believes these advances could speed up expansion of the robotaxi fleet to San Francisco and potentially allow earlier removal of safety monitors.

The analyst looked at Waymo’s growth as a blueprint for Tesla’s potential. Alphabet’s autonomous taxi service reached 450,000 fully autonomous rides per week, up from 250,000 in April. Waymo aims to hit 1 million trips weekly by the end of 2026.

Not all analysts share the enthusiasm. Barclays analyst Dan Levy kept his hold rating and $350 price target. He questioned the rollout timing and scale given state-by-state regulatory challenges.

About 40% of analysts covering Tesla rate shares as a buy. That’s below the 55% average buy rating for S&P 500 stocks. The average analyst price target sits at $400 per share.

Sales Challenges Persist Despite Stock Gains

The stock rally comes as Tesla grapples with real business headwinds. U.S. sales in November dropped to a four-year low, according to Cox Automotive.

First quarter deliveries fell 13%, with automotive revenue down 20%. Second quarter auto revenue dropped another 16%.

Third quarter brought a 12% revenue increase as buyers rushed to claim federal EV tax credits before they expired in September. The stock jumped 40% during that period.

Tesla released more affordable Model Y and Model 3 variants in October. Those cheaper options appear to be eating into sales of higher-priced models rather than growing the overall pie.

President Donald Trump ended the federal EV purchase tax credit after taking office. Musk’s role running the Department of Government Efficiency under Trump hasn’t translated to sales benefits.

Consumer backlash against Musk’s political activities continues to weigh on the brand. His endorsements of far-right political figures and incendiary rhetoric have sparked pushback from some buyers.

Competition from Chinese automakers BYD and Xiaomi, plus European rivals like Volkswagen, adds pressure. These companies offer lower-cost or more appealing alternatives in key markets.

Tesla operates a robotaxi service in Texas and California, though vehicles still include human safety supervisors. The company’s automated driving systems being tested in Austin aren’t yet widely available. Safety questions remain about the technology’s readiness for full deployment.

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