Why Tesla Stock Is Making a Run at a Record High

Coming into Tuesday trading, Tesla stock was up about 18% this year. (THIBAUT DURAND/Hans Lucas/AFP via Getty Images)

Key Points

• Tesla stock rose 3.6% on Monday, closing at $475.31, nearing its all-time closing high of $479.86 from December 2024.
• Robo-taxi optimism, fueled by Tesla’s testing of vehicles without safety monitors, is driving recent stock gains.
• Mizuho raised its price target for Tesla stock to $530 from $475, maintaining a Buy rating due to robo-taxi progress.

Tesla stock just missed a new all-time high on Monday, boosted by robo-taxi optimism. Shares have a shot at new all-time highs set almost a year ago to the day, helped by a target-price boost at Mizuho.

Tesla stock traded as high as $482.06, which would be a record close for shares. The stock was up 0.7% at $478,58 in midday trading, while the S&P 500 and Dow Jones Industrial Average were down 0.3% and 0.4%, respectively.

Shares closed at $475.31 on Monday, up 3.6% on the day. That’s only the second close above $470 and less than $5 from a new all-time closing high. Tesla stock closed at $479.86 on Dec. 17, 2024. The stock’s all-time intraday high is $488.54, reached on Dec. 18, 2024.

The 2024 highs were fueled by President Donald Trump’s election in November. Tesla CEO Elon Musk was a strong supporter of the president, and investors came to believe his proximity to the White House would benefit Tesla.

Things didn’t unfold as expected. Musk’s political activities arguably hurt Tesla’s brand image, and Trump followed through on promises to end the federal EV purchase tax credit. The loss of the federal subsidy at the end of September weighed on EV sales in October and November.

Despite the rocky relationship, Tesla launched its AI-trained robo-taxi service in Austin, Texas, in June, which investors believe will unlock a new era of earnings growth for the company.

Robo-taxis have fueled the recent rally. Monday’s jump came after Musk tweeted, on Sunday, that Tesla was testing robo-taxis without safety monitors in the car. That’s another step on the path to expanding Tesla’s service across the U.S.

Tesla’s robo-taxi service launched with safety monitors sitting in the front passenger seat. In October, Musk said he hoped to remove the monitors by year’s end.

“We believe improvement in the Full Self-Driving [driver assistance technology] could support an accelerated expansion of the robotaxi fleet in Austin, San Francisco, and potentially earlier elimination of the chaperone,” wrote Mizuho analyst Vijay Rakesh in a Monday evening report.

He’s looking at Alphabet’s Waymo to figure out how Tesla’s improvements can translate into more robo-taxi business. Waymo has reached about 450,000 fully autonomous taxi rides per week, up from 250,000 in April. It aims to reach 1 million trips per week by the end of 2026.

Rakesh raised his price target on Tesla stock to $530 from $475. He kept his Buy rating on the stock.

“Excitement continues to build for Tesla’s autonomous vehicle and Robotaxi narrative after at least partly achieving removal of safety monitors by year-end,” wrote Barclays analyst Dan Levy on Monday. “Yet key questions remain on roll-out timing/scale.”

How fast Tesla can expand the service amid patchwork state-by-state regulations is a concern for him. He kept his Hold rating and $350 price target for Tesla stock.

Overall, 40% of analysts covering Tesla stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Tesla stock is about $400 a share.

Write to Al Root at allen.root@dowjones.com