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Elon Musk’s Latest Moves Fuel Tesla Stock Optimism in 2025
Tesla (TSLA), the electric vehicle titan, has had a rollercoaster start to 2025. After a tough first half—where shares dropped over 20%—the EV maker stunned investors with a strong third-quarter surge, emerging as the best-performing stock among the famed Magnificent Seven tech giants. With shares now up roughly 10% since January, the big question remains: where does Tesla go from here?
Tesla’s Rocky Start to 2025
The first six months of 2025 proved challenging for Tesla, as the company’s stock struggled to keep pace. While the broader market, including the S&P 500 and the Magnificent Seven tech group, clawed back into positive territory by midyear, Tesla’s shares lagged behind, signaling investor uncertainty.
Q3 Surge Fuels Investor Optimism
Everything changed in the third quarter. Tesla not only recovered but outperformed its Big Tech peers, driven by growing excitement around its ventures beyond traditional car sales. Investors are increasingly bullish on Tesla’s autonomous driving and robotics initiatives, which analysts see as key to the company’s long-term growth.
Wedbush analysts encapsulated this shift perfectly in their recent report: “The Tesla story going forward is around the AI transformation being led by the autonomous and robotics initiatives.” The focus now is squarely on the rollout of Tesla’s highly anticipated robotaxi service and other AI-driven technologies that could revolutionize transportation and beyond.
CEO Moves and Market Confidence
Investor sentiment has also been boosted by a new compensation proposal for Elon Musk and a significant stock purchase by the Tesla CEO himself—moves that have reassured the market about leadership’s commitment and confidence in the company’s future.
Third-Quarter Earnings: What to Watch
With Tesla’s third-quarter earnings report scheduled for Wednesday afternoon, anticipation is high. Early data shows deliveries are on track, and quarterly results have already exceeded expectations. Analysts from Visible Alpha forecast revenues of $26.6 billion and net income around $1.5 billion, though all eyes will be on the company’s updated vehicle lineup and any signals about demand trends.
Despite this optimism, Tesla’s stock has pulled back slightly from its year-to-date high near $460, hovering around current levels that reflect the recent rally. Market watchers remain cautious: the average price target on Visible Alpha stands near $365, roughly 17% below Friday’s closing price, indicating lingering concerns among Wall Street analysts.
Tesla vs. The Magnificent Seven
Tesla’s performance this year has been impressive but still trails the broader Magnificent Seven ETF (MAGS), which tracks the elite group of tech stocks including Apple, Amazon, and Microsoft. As Tesla kicks off the Big Tech earnings season, all eyes will be on whether it can sustain momentum amid heightened scrutiny.
Big Tech Earnings Season Begins
Tesla’s earnings release marks the unofficial start of the third-quarter reporting period for the Magnificent Seven. Netflix (NFLX) is also set to report soon, signaling a critical week ahead for tech investors.
Bank of America analysts recently noted that S&P 500 companies that have reported so far have beaten earnings estimates by an average of 7%, with an expected 11% growth in Q3 earnings overall. Tesla will play a key role in shaping market sentiment as the largest EV and AI-focused player in the space.
