Tesla stock is up 30% this month, nearing its all-time high

Tesla’s stock has surged by more than 30% in September, according to data from Bloomberg, as traders and shareholders alike rally around Elon Musk’s comeback to the company.

The surge has placed the stock among the top 10 performers in the S&P 500 for September, and now we’ve got third-quarter sales results due later this week.

The stock’s rise has been dramatic since April 8, the day President Donald Trump paused global tariffs, coinciding with Tesla’s lowest point of the year.

From there, the stock has shot up nearly 100%, the best performance of any company in the Magnificent Seven group. Tesla is now trading at about $440, closing in on its record high of $479.86 set on December 17.

Analysts raise targets as Tesla leans into AI bets

The new wave of buying is built on expectations that Elon can steer Tesla away from being just a carmaker and into the world of artificial intelligence.

Earlier this month, Tesla’s board put forward a $1 trillion pay package for him, proving yet again how strongly they support the idea of transforming Tesla into a business that builds humanoid robots and operates fleets of self-driving taxis.

But even with the rally, concerns are loud. “Tesla trades at an eye-watering multiple, its earnings are shrinking amid softening EV demand and cutthroat competition, and EV credits are about to expire, further dampening sales,” said Irene Tunkel, chief U.S. equity strategist at BCA Research.

Those EV credits vanish after Tuesday, when Trump’s administration ends the incentive program. Analysts say sales for the quarter will likely show a last-minute rush of buyers trying to secure the discount before demand cools off in the months ahead.

At the same time, Wall Street analysts have been upgrading Tesla. Dan Ives of Wedbush increased his price target to $600 from $500, the highest target for Tesla at the moment. He said the company was entering “the next stage of its AI autonomous path.” The stock has also received multiple other upgrades as traders look beyond cars to potential AI revenues.

Investors chase AI dream despite weak EV sales

Elon has fueled this frenzy with bold claims. On his platform X last week, he said Tesla would soon “feel almost like it is sentient being.” He also predicted that 80% of Tesla’s revenue will come from AI robots in the future. That message has landed strongly with retail investors.

“Tesla is the retail investors’ darling,” Tunkel said. “Tesla’s sharp rally has been fueled by these investors’ enthusiasm for its future beyond EVs, as they are envisioning a company that mass-produces robotaxis and humanoid robots, potentially tripling in value along the way.”

But fundamentals still paint a weaker picture. EV sales have struggled, and Tesla’s autonomous vehicle efforts have had a slow start. In response, Elon has shifted attention to the Optimus robots venture, presenting it as Tesla’s next growth engine.

The pivot reflects a broader trend where AI has been the main driver of stock gains across the Magnificent Seven. Yet unlike Nvidia, Alphabet, Meta, and Microsoft, Tesla does not yet have AI products generating consistent profit.

That gap has raised skepticism. “A dose of skepticism is likely warranted,” said Dave Mazza, CEO of Roundhill Financial. “But the market is rewarding AI leadership, and Tesla has an early lead in embodied intelligence. Right now, the results matter less than the vision.”

He also said Tesla has “real momentum behind it” and could break to a new high because investors have “a fresh dream to chase.” But he warned that the company needs to show real progress on projects if it wants the rally to last.

The stakes are clear. This week’s sales report may add fuel in the short term, but the long-term test lies in whether Elon can actually deliver on the grand AI story. “Elon is selling a dream, and many retail investors are buying it,” Tunkel said. “Can the rally continue? Sure – powered by momentum and FOMO. Yet if there’s a bubble in today’s hot market, Tesla is ‘it’.”

Sharpen your strategy with mentorship daily ideas - 30 days free access to our trading program