TLDR
- Tesla stock gained 1.2% in premarket trading, marking six consecutive days of growth
- Elon Musk purchased $1 billion worth of Tesla shares, his first open-market buy since 2020
- Stock shows overbought conditions with relative strength above 70
- CFRA analyst downgraded shares citing disconnection from fundamentals
- Company faces NHTSA investigation into Model Y door failures
Tesla stock continued its impressive run Tuesday, gaining 1.2% in premarket trading to reach $415 per share. The electric vehicle giant has now posted gains for six straight trading sessions.
This latest surge caps off a remarkable five-day run that has added nearly 20% to Tesla’s share price. The rally brings Tesla’s 2025 gains to roughly 2% and pushes its 12-month returns to an impressive 81%.
The momentum received fresh support from news of CEO Elon Musk’s rare stock purchase. Regulatory filings revealed Musk bought approximately 2.57 million Tesla shares on September 12, spending close to $1 billion.
Musk paid between $372 and $396 per share for his purchase. This marks his first significant open-market buy since February 2020, making the timing particularly noteworthy.
The purchase comes as Tesla pushes deeper into artificial intelligence and autonomous driving technology. The company recently launched a pilot robotaxi service in Austin and plans volume production of its Cybercab autonomous vehicle next year.
Musk has repeatedly emphasized that AI and robotics will drive Tesla’s future value. His billion-dollar investment signals strong confidence in this strategic direction.
Technical Indicators Flash Warning Signs
Despite the positive momentum, technical analysis reveals potential concerns. Tesla’s relative strength index has climbed above 70, indicating overbought conditions.
This metric suggests the stock has risen too quickly and may be due for a pause. The last time Tesla reached similar overbought levels was December 2024, when shares peaked near $490 before declining to $214.25 in April.
CFRA analyst Garrett Nelson responded to the rally by downgrading Tesla on Monday. Nelson cited valuation concerns, noting the stock trades at approximately 164 times estimated 2026 earnings.
He maintained his $300 price target, well below current trading levels. Nelson argued Tesla’s valuation has become disconnected from its underlying fundamentals.
Mixed Wall Street Reception
Analyst sentiment on Tesla remains divided. Currently, only 45% of analysts covering the stock rate it a buy, compared to the 55% average for S&P 500 companies.
The average analyst price target sits around $323 per share. With over 50 analysts following Tesla, few major brokers maintain targets above Monday’s closing price.
Tesla’s recent financial performance has shown mixed results. Vehicle deliveries declined year-over-year in both the first and second quarters as the company navigated price cuts and model refreshes.
Second-quarter revenue fell 12% to $22.5 billion, with operating income of $900 million and a 4.1% operating margin.
However, Tesla’s energy storage business demonstrated strength with record deployments and $846 million in energy gross profit.
The stock appeared unfazed by news of a National Highway Traffic Safety Administration investigation into door failures on some Model Y vehicles. Such regulatory probes are routine in the automotive industry.
Tesla stock trades at $409.96 with a market capitalization of $1.3 trillion following Monday’s close.
