Tesla Stock Is Close to a Record High. What Will Get It There.

Bullish Tesla investors believe AI-trained humanoid robots are key to the company’s future. (HECTOR RETAMAL/AFP via Getty Images)

Key Points

• Tesla stock is trading near its all-time high, boosted by artificial intelligence optimism and a price-target increase from BofA Securities.
• BofA Securities analyst John Murphy raised his price target for Tesla to $471 from $341, but maintains a Hold rating due to the stock’s valuation.
• Tesla’s stock has increased 14% this year, 77% over the past 12 months, and 58% over the last six months.

Tesla stock is within shouting distance of an all-time high, boosted by artificial intelligence and Wall Street.

Shares of the electric-vehicle maker traded as high as $465.70, but slid back to $461.45 on Tuesday. The stock scored a gain of 0.2%, while the S&P 500 finished flat and the Dow Jones Industrial Average lost 0.2%.

Wednesday’s close leaves Tesla stock about 4% away from its record closing high of $479.86 reached on Dec. 17, 2024, and 6% away from an intraday record of $488.54, reached on Dec. 18, 2024.

BofA Securities analyst John Murphy raised his price target on the stock to $471 from $341. Tesla’s robo-taxi and robot operations are worth more than they used to be, and Murphy also used a lower discount rate to value shares.

Still, he rates shares Hold, calling the valuation “stretched.” Tesla stock trades for about 200 times estimated 2026 earnings. Aside from situations such as Boeing, which has depressed earnings after suffering through years of losses, Tesla and Palantir Technologies are the two most expensive stocks in the S&P 500, judging by price-to-earnings ratios.

Overall, 43% 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 $395 a share. That’s up about $25 since the company reported weaker-than-expected third-quarter earnings on Oct. 22.

Wednesday’s move comes after a 1.8% jump on Tuesday. Tesla stock traded as high as $467 before closing above $460 a share for just the fourth time. AI optimism appeared to be helping.

Nvidia stock rose 5% to $201.03 as the company hosted a technology conference in Washington, D.C. Melius analyst Ben Reitzes called it a “homerun” and “extremely bullish.”

“The most important thing learned was that Blackwell and initial Rubin orders over the next five quarters amount to what seems to be over $340 billion, and these don’t include new orders,” wrote the analyst.

It’s a sign AI optimism isn’t slowing. Tesla investors have been focused on the company’s AI opportunities, believing that AI-trained robots and robo-taxis will unlock a new era of earnings growth for the EV maker.

Coming into Wednesday trading, Tesla stock was up 14% this year and up 77% over the past 12 months. Shares have also gained 58% over the past six months.

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