Why Is Tesla Stock Up Today?

Business Insider

11 hours ago

Tesla shares (TSLA) are on the move again. The stock rose 1.2% to $338 in early Wednesday trading. This puts it on track for a sixth consecutive gain, adding nearly 11% since August 5. Over the same period, the S&P 500 is up 0.4% and the Dow Jones Industrial Average has gained 0.6%.
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Part of the rally comes from broader market strength. Investors have been more willing to buy growth stocks this week, and Tesla has benefited from the shift. Stronger sentiment in electric vehicles has also helped, as U.S. third-quarter demand shows signs of holding up despite industry challenges.
Federal Tax Credit Fuels Demand
Buyers are rushing to place orders for new Teslas before the $7,500 federal EV tax credit expires in September. This is creating longer wait times for certain models, which signals healthy demand. While the Inflation Reduction Act extends the credit through 2032, current rules limit eligibility, and upcoming changes may reduce the number of qualifying vehicles.
This urgency in the U.S. market is giving Tesla a short-term boost. Investors see it as a cushion for third-quarter sales, especially after the company delivered about 721,000 cars in the first half of 2025, which was down 13% from last year.
Musk Focuses on Robo-Taxis
Another driver of the rally is Tesla's renewed focus on self-driving technology. Over the weekend, CEO Elon Musk shared updates on the company's Full Self Driving (FSD) system. He said the version running in Tesla's Austin robo-taxis is more advanced than what current Tesla drivers use. He also suggested that upcoming FSD updates will bring significant improvements.
These comments have reignited enthusiasm for Tesla's AI and autonomous driving ambitions. For many investors, the future revenue potential from self-driving cars matters more than current vehicle sales.
Technical Breakout Draws Traders
Tesla's recent price action has also caught the attention of technical analysts. Fundstrat's head of technical strategy, Mark Newton, noted that a close above $338 would be a bullish signal. Tesla achieved that on Monday for the first time since late June, encouraging more buying from momentum traders.
With technical conditions improving and bullish catalysts in play, Tesla's short-term outlook has strengthened. The rally has lifted the stock 64% over the past 12 months, even though it remains down about 16% in 2025.
Is Tesla Stock a Buy, Hold, or Sell?
According to TipRanks, Wall Street remains split on Tesla's outlook. Data from the past three months shows 37 analysts covering the stock, with 14 rating it a Buy, 15 calling it a Hold, and eight recommending a Sell.
The average 12-month TSLA price target sits at $307.23, which is about 10.9% below Tesla's last close at $344.74.