Tesla (TSLA) shares climbed 7% closing above $395, outperforming a flat S&P 500 and a Dow Jones Industrial Average that slipped 0.2%.
The move follows another 6% rally the day before, supported by inflation data that reinforced expectations of interest rate cuts—welcome news for automakers, given the financing-heavy nature of car purchases.
The stock’s latest run marks its highest close since February, with technical analysts suggesting Tesla could soon test $384. That target reflects short-term momentum, not a fundamental call, but it underlines how traders are responding to Tesla’s breakout from a recent trading pattern.
Musk’s $1 Trillion Pay Package and the Optimus Bet
Much of the recent optimism centers on Tesla’s unprecedented $1 trillion compensation package for CEO Elon Musk. The award is not cash but stock-based, divided into 12 tranches that Musk can only unlock by meeting demanding performance milestones.
Those milestones include revitalizing auto sales, scaling robotaxi operations, and developing humanoid robots under the Optimus initiative. Investors who back the package see it as a powerful alignment of Musk’s incentives with Tesla’s long-term growth, even if the goals are extraordinarily ambitious—such as pushing Tesla’s market cap toward $8.6 trillion, more than seven times today’s level.
Tesla bulls argue that Musk’s pivot toward artificial intelligence and robotics could redefine the company far beyond cars. In fact, Musk has suggested as much as 80% of Tesla’s future value could come from Optimus, its humanoid robot project.
Much of the recent optimism centers on Tesla’s unprecedented $1 trillion compensation package for CEO Elon Musk. The award is not cash but stock-based, divided into 12 tranches that Musk can only unlock by meeting demanding performance milestones.
Those milestones include revitalizing auto sales, scaling robotaxi operations, and developing humanoid robots under the Optimus initiative. Investors who back the package see it as a powerful alignment of Musk’s incentives with Tesla’s long-term growth, even if the goals are extraordinarily ambitious—such as pushing Tesla’s market cap toward $8.6 trillion, more than seven times today’s level.
Tesla bulls argue that Musk’s pivot toward artificial intelligence and robotics could redefine the company far beyond cars. In fact, Musk has suggested as much as 80% of Tesla’s future value could come from Optimus, its humanoid robot project.
A Price Tag That Defies Convention
Even with Thursday’s rally, Tesla remains one of Wall Street’s most polarizing stocks. The company trades at about 140 times expected 2026 earnings—by far the highest multiple among the Magnificent Seven tech leaders. For comparison, Nvidia, the next priciest of the group, trades at roughly 31 times earnings.
This lofty valuation explains both the optimism and skepticism surrounding Tesla. Roughly 80 million shares are currently sold short, about 3% of Tesla’s float and notably higher than the group average. For bullish investors, Tesla is less about today’s slowing EV sales and more about betting on Musk’s ability to deliver breakthroughs in self-driving, AI, and robotics.
Even with Thursday’s rally, Tesla remains one of Wall Street’s most polarizing stocks. The company trades at about 140 times expected 2026 earnings—by far the highest multiple among the Magnificent Seven tech leaders. For comparison, Nvidia, the next priciest of the group, trades at roughly 31 times earnings.
This lofty valuation explains both the optimism and skepticism surrounding Tesla. Roughly 80 million shares are currently sold short, about 3% of Tesla’s float and notably higher than the group average. For bullish investors, Tesla is less about today’s slowing EV sales and more about betting on Musk’s ability to deliver breakthroughs in self-driving, AI, and robotics.
Conclusion
Tesla’s latest rally highlights the market’s willingness to look past immediate challenges—like slowing EV demand and stiff competition—in favor of Musk’s sweeping long-term vision. While skeptics see a stock priced for perfection, supporters view it as a unique way to gain exposure to artificial intelligence, robotics, and the future of transportation.
For investors, the debate remains the same: Is Tesla’s valuation a bubble waiting to burst, or a justified premium on Elon Musk’s next big breakthrough? Either way, the company continues to trade less like a carmaker and more like a high-stakes bet on the future.
Tesla’s latest rally highlights the market’s willingness to look past immediate challenges—like slowing EV demand and stiff competition—in favor of Musk’s sweeping long-term vision. While skeptics see a stock priced for perfection, supporters view it as a unique way to gain exposure to artificial intelligence, robotics, and the future of transportation.
For investors, the debate remains the same: Is Tesla’s valuation a bubble waiting to burst, or a justified premium on Elon Musk’s next big breakthrough? Either way, the company continues to trade less like a carmaker and more like a high-stakes bet on the future.
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