All but one of the so-called Magnificent Seven stocks have reached new highs at some point this year - and Tesla is the outlier.
Not all megacap technology stocks have beaten the S&P 500 SPX this year, nor are all in record territory currently. And while Tesla's $(TSLA)$ 11% year-to-date gain is actually better than Amazon.com's (AMZN) 4% gain, the electric-vehicle company is still chasing the record close of $479.86 that it achieved on Dec. 17, 2024. The stock currently trades at $449 per share, or a little more than 6% below that high.
It's been a volatile year for Tesla investors, who started off 2025 feeling optimistic that CEO Elon Musk's "bromance" with President Donald Trump would come to benefit the company. But those gains started chipping away after Tesla was hit by waves of mass protests in the U.S. and abroad over Musk's political activities.
That, along with tough competition in China, has helped put the EV maker on pace for its second straight annual sales decline.
But the stock has rallied more recently as Tesla has made strides toward its ambitious artificial-intelligence and robotics goals. Also helping matters is that investors in early November approved a $1 trillion stock-based pay package for Musk that is expected to tie him to the company for at least a decade.
"I think there's a wave of relief" for investors, said Brian Mulberry, a portfolio manager at Zacks Investment Management, who noted that the pay vote removed some uncertainty over Tesla's future.
It also incentivizes Musk to drive dramatic growth at Tesla. For him to cash out the full benefits of the plan, Tesla's value will need to grow to $8.5 trillion.
There are few Tesla-specific catalysts that could help push the stock to a new record before the year ends, beyond broad market momentum. One of the more likely to occur would be an expansion of Tesla's burgeoning ride-hailing service, although Musk has lowered his expectations.
Earlier this year, Tesla launched what it has labeled a "robotaxi" service in Austin, Texas, and in the San Francisco Bay Area. However, the company uses Model Y SUVs overseen by a safety monitor who is capable of intervening as needed. By the end of December, Tesla aims to offer its services in at least seven cities and take the safety monitor out of its vehicles in Austin.
"The Tesla Robotaxi fleet in Austin should roughly double next month," Musk said in a Nov. 26 post on X.
Although Tesla has not disclosed the size of its fleet, a crowd-sourced effort estimates that the company operates 29 vehicles in Austin and 122 in the San Francisco Bay Area. That would mean Tesla is aiming for a fleet of about 60 vehicles in Austin by the end of December.
That's well below Musk's far more ambitious goals. In October, he said on a podcast that Tesla would have "probably 500 or more" vehicles in Austin and at least 1,000 in the San Francisco Bay Area before 2026. Despite that, investors would still likely welcome any growth as a sign of progress, Mulberry said.
Beyond December, it's easier to see more room for Tesla to grow. The company plans to begin mass production of its designated robotaxi next year, along with the long-awaited Tesla Semi truck.
Tesla has also been lobbying European regulators to approve its advanced driver-assistance system, which could allow it to collect more data and potentially help boost flagging sales. Musk has said Chinese regulators will fully approve the software next year, which could help it fend off local Chinese rivals.
Additionally, Optimus, Tesla's humanoid robot, is set for a demonstration in early 2026 and volume production at the tail end of the year. Morgan Stanley estimates that the market for humanoid robots will surpass $5 trillion by 2050.
