The stock rose 2.7% in early Friday trading to $378.62, beating a flat S&P 500 and a small drop in the Dow Jones Industrial Average. That was after a 6% spike on Thursday, which was driven by in-line inflation data that boosted hopes for interest rate cuts.
Lower rates of borrowing tend to be good news for car manufacturers, as automobiles are mainly financed transactions. Also, not surprisingly, rivals such as General Motors and Ford also rose on Thursday, increasing 2.4% and 3%, respectively.
Technical Breakout Indicates Towards Upside
Tesla’s stock has already busted out of a short-term trading pattern in August, positioning for a move towards $384, as per Will Tamplin, senior technical analyst at Fairlead Strategies.
He said,
“Tesla broke out of a short-term [trading] pattern in August, which targeted a [trading] level near $384. We think that level will be reached soon since short-term momentum is accelerating with [Thursday’s] move.”
His case isn’t based on fundamentals of the companies, but on chart patterns and momentum indicators that have been used by analysts to time short and medium-term shifts. On this technical configuration, the stock may gain another 4% to 5% from Thursday’s close.
Analysis Beyond Charts
Tesla’s stock recorded its highest close since February, but the stock is still down roughly 9% year to date. Nevertheless, shares have advanced 62% over the last 12 months, which highlights how rapidly the sentiment can change when AI aspirations and leadership optimism are in the spotlight.
One major morale booster has been Tesla’s CEO compensation package for Elon Musk, which is estimated at up to $1 trillion if performance targets are achieved. Whatever the current scenario is, Wall Street seems at ease with the package, seeing it as compatible with Tesla’s long-term strategy, particularly in autonomous driving.
TD Cowen’s Itay Michaeli pointed out that Tesla’s special committee provided transparency on the proposal on a recent call. He said,
“Tesla hosted a sell-side call with the Special Committee of the Board to discuss the recent CEO compensation proposal. 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 also maintained a Buy rating and a $374 price target.
Core Business Hurdles & New Initiatives
In spite of the excitement, Tesla’s fundamental car performance remains to be an obstacle. Tesla reported deliveries around 721,000 vehicles in the first half of 2025, which was down by 13% from last year. Reduced volumes, along with price reductions in different models has squeezed down the margins.
Nevertheless, Tesla has been able to counter some of the stagnations with progress in new projects. It has managed to initiate a small self-driving taxi service in Austin, Texas in June, which is a primary step towards its highly hyped robotaxi network.
If efficiently scaled, that business could change the narrative of Tesla from a carmaker to a mobility and AI-powered platform, which the investors keep betting on.
Where Tesla Goes from Here
Tesla’s recent rally underscores the balancing act between short-term trading momentum and long-term underlying issues. On one side, charts are indicating further upside in the short term, along with technical analysts highlighting gains that are fueled by momentum.
On the other hand, Tesla’s falling car sales serve as a reminder to investors that its financial engine continues to falter. Tesla’s big bets on autonomy, AI, and new business models may ultimately be worthy of its valuation and even drive it further higher, but risks of execution remain high.
For the time being, the stock’s bounce is a reminder of how fast Tesla can grab market attention. If momentum takes the shares toward the technical goals and the faith in Musk’s compensation plan supports Wall Street’s optimism, Tesla might add to its progress. But the next chapter of the story will be set by whether or not the company can perform on both pathways or not.
Traders can drive the stock up over the next few weeks, but longer-term investors need to see if Tesla gets back on track in car sales, makes progress on robotaxi plans, and demonstrates that its expansion beyond cars can indeed generate substantial profits.
The stock seems to be stuck between two worlds, one with a momentum-driven playground for speculators, and the other as a long-term patience test for believers. Tesla’s rally may not be the end but whether it’s the beginning of a new chapter or only another twist is what will set its course from here.
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