Tesla Stock Is on a Tear. Here’s Where It’s Headed Next.

Tesla’s stock price has ranged from $212.11 to $488.54 over the past 12 months. (Getty Images)

Key Points

About This Summary

• Tesla stock surged, outperforming the S&P 500 and Dow, fueled by optimism and technical trading patterns.
• Anticipation of the removal of a $7,500 federal tax credit at the end of September may be boosting third-quarter sales.
• Investors appear unconcerned about Elon Musk’s political activities and are more focused on his leadership of the EV company.

Tesla stock rose Friday as investors suddenly appeared more optimistic about the outlook. It’s also possible that traders are in control of the recent rally.

Shares of the electric-vehicle maker jumped 7.4% to $395.94, while the S&P 500 was flat and the Dow Jones Industrial Average fell 0.6%.

The move comes after Tesla stock added 6% on Thursday, helped in part by in-line inflation data that solidified investors’ belief that rate cuts are coming. Auto companies like lower rates because cars are generally financed. Shares of General Motors and Ford Motor rose 2.4% and 3%, respectively, on Thursday as well.

Tesla shares haven’t closed above $390 since early February and haven’t traded above $400 since early January, leaving investors wondering what’s coming next.

“Tesla broke out of a short-term [trading] pattern in August, which targeted a [trading] level near $384,” said Will Tamplin, a senior technical analyst at Fairlead Strategies. “We think that level will be reached soon since short-term momentum is accelerating with [Thursday’s] move.”

He saw another 4% or 5% in the recent rally—at Thursday’s close. Tesla stock blew by that target on Friday. Tamplin wasn’t making a fundamental call on Tesla stock. Technical analysts use stock charts and market history to gauge investors’ sentiment and forecast where a stock can go over the short and medium term.

Traders use charts, too, and they like to buy things that look like they have more room to run.

With Tesla past that level, the move on Friday puts late 2024 highs into view. Tesla’s all-time high is $488.54, reached on Dec. 18 last year.

Fundamentally-minded investors might have a role in the rally, too: They could be feeling better about third-quarter EV sales. U.S. buyers could try to beat the removal of the $7,500 federal purchase tax credit, which goes away at the end of September. The credit was eliminated by President Donald Trump’s tax and spending bill passed on July 4.

Gary Black, co-founder of the Future Fund exchange-traded fund, says Telsa’s third-quarter delivery results should beat Wall Street’s estimate of about 430,000 cars, but he cautions that fourth-quarter numbers could see a dip after the credit expiration.

It’s been a strong week for Tesla stock. Through Friday’s trading, shares were up about 13%. Another thing that appears to have helped recently is the company’s massive pay package for CEO Elon Musk, which is worth roughly $1 trillion if all performance incentives are met. It’s an unprecedented pay package, but Wall Street doesn’t seem to mind.

“Tesla hosted a sell-side call with the Special Committee of the Board to discuss the recent CEO compensation proposal,” wrote TD Cowen analyst Itay Michaeli on Thursday. “We walked away with a clearer view of the proposals. The Product and [earnings] milestones outlined in the proxy seem well-aligned with our Tesla autonomous vehicle thesis…leaving us more confident about the long-term trajectory.” He rates shares Buy and has a $374 price target for the stock.

Investors want Musk running their EV company, despite any potential drawbacks. Board Chair Robyn Denholm told Bloomberg Television on Friday that she wasn’t worried too much about Musk’s political activities, which have been blamed for falling EV sales for Tesla.

“My view is over the long-term, people buy things that they really love,” she said. “Tesla vehicles are things people really love.”

Coming into Friday trading, Tesla stock was down about 9% so far this year, but up about 62% over the past 12 months. Investors have been balancing falling car sales with AI opportunities.

Tesla delivered about 721,000 cars in the first half of 2025, down 13% year over year. It also successfully launched a small self-driving cab service in Austin, Texas in June.

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