TLDR
- Tesla stock rose 1.2% in premarket trading Tuesday, extending a five-day winning streak with gains of nearly 20% over that period
- CEO Elon Musk purchased approximately $1 billion worth of Tesla shares on September 12, his first open-market buy since February 2020
- Technical indicators show Tesla stock is overbought with relative strength above 70, similar to levels seen before the December peak near $490
- CFRA analyst Garrett Nelson downgraded the stock Monday, citing valuation concerns with shares trading at 164 times estimated 2026 earnings
- Tesla faces an NHTSA investigation into door failures on some Model Y vehicles, though this appears to have minimal market impact
Tesla stock extended its hot streak Tuesday morning, rising 1.2% in premarket trading to $415. The electric vehicle maker has now posted gains for six consecutive trading sessions.
This latest bump brings Tesla’s five-day surge to nearly 20%, adding about $64 to the share price. The stock now sits up roughly 2% for 2025 and an impressive 81% over the past 12 months.
The rally got fresh fuel from news that CEO Elon Musk made a rare stock purchase. Regulatory filings show Musk bought approximately 2.57 million shares on September 12, spending close to $1 billion.
He paid between $372 and $396 per share for the stock. This marks Musk’s first open-market purchase since February 2020, when he bought just 13,000 shares.
The timing of Musk’s buy sends a clear message. Tesla has been pushing hard into artificial intelligence and autonomous driving technology this year.
Management has repeatedly said these areas will drive future value. The company launched a pilot robotaxi service in Austin, Texas, and plans to start volume production of its Cybercab autonomous vehicle next year.
Musk has also been vocal about wanting to maintain voting control as Tesla expands into AI. His billion-dollar purchase increases his personal stake in the company’s future.
Technical Warning Signs Emerge
Despite the positive momentum, some warning flags are appearing. Technical analysis shows Tesla’s relative strength index has climbed above 70, indicating the stock is overbought.
This means shares have risen too far, too fast. It often signals a stock may be due for a pause or pullback.
The last time Tesla’s relative strength hit these levels was December 2024. Back then, shares peaked near $490 before falling as low as $214.25 in April during tariff concerns.
CFRA analyst Garrett Nelson took notice of the rapid gains. He downgraded Tesla on Monday, saying the stock’s valuation has become disconnected from its fundamentals.
At current levels, Tesla trades for about 164 times estimated 2026 earnings. Nelson kept his $300 price target, well below Monday’s closing price.
Mixed Reception From Analysts
Wall Street remains divided on Tesla’s prospects. Only 45% of analysts covering the stock rate it a buy, below the 55% average for S&P 500 companies.
The average analyst price target sits around $323 per share. With more than 50 analysts following Tesla, only a handful of major brokers have targets above Monday’s closing price.
The highest price targets range from $440 to $550. The lowest stretch from $120 to $220, showing the wide range of opinions.
Tesla’s recent business results have been mixed. Vehicle deliveries fell year-over-year in the first and second quarters as the company worked through price cuts and model updates.
Second-quarter revenue dropped 12% to $22.5 billion. Operating income came in at $900 million with a 4.1% operating margin.
However, the energy storage business showed strength. Tesla reported record trailing-12-month deployments and $846 million in energy gross profit.
Tesla stock shrugged off news that federal safety regulators are investigating door failures on some Model Y vehicles. The National Highway Traffic Safety Administration probe follows reports of doors not opening properly.
Such investigations are routine and often lead to recalls. Through Friday, there were already 28 recalls affecting 2.1 million vehicles in September alone from various automakers.
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