It took 1,133 days, but Tesla shares finallyhit a new high.
Coming into Thursday trading, Tesla stock was up about 69% since the Nov. 5 election after closing above $420 on Wednesday.
The stock closed Wednesday at $424.77, eclipsing the prior split-adjusted high of $409.97 reached on Nov. 4, 2021. Shares traded as high as $424.88 on Wednesday, passing the prior intraday high of $414.50 reached on the same day.
The rally has left investors—and Wall Street—breathless. The stock is up about 69%, or $173 a share, since the Nov. 5 election, adding some $555 billion to the company’s market value. Wall Street, meanwhile, has increased target prices by an average of about $40 a share. Analysts have struggled to keep up.
Tesla’s market value now sits north of $1.3 trillion, more than $100 billion higher than the 2021 high. (Tesla’s market value eclipsed its 2021 high on Tuesday. There are about 150 million more shares outstanding today compared to then.)
All the numbers are impressive, but the next set of numbers isn’t so cheery. Tesla stock didn’t do so well the year following the 2021 high. Three months later shares were down about 28%, falling from about $410 to $291 a share. A year later Tesla stock was at $207, off almost 50%.
That isn’t encouraging, but there are other metrics to look at. Tesla shares currently trade for about 125 times estimated 2025 earnings. Tesla stock has been that expensive in the past, notably in January 2022, January 2021, and at various points in 2020.
The post-January 2022 performance looks very similar to the performance after the November 2021 high. Shares were down by roughly two-thirds a year later.
In 2020 and 2021, shares did just fine after reaching lofty valuation multiples. Tesla stock gained more than 740% in 2020 and added another 50% in 2021.
Tesla stock traded for about 145 times current year earnings in early 2022, points out Future Fund Active ETF (FFND) co-founder and Tesla shareholderGary Black. At his adjusted earnings estimate of $3.30 for 2025 and a similar multiple, Tesla shares could approach $480. His $3.30 estimate could be low if Tesla’s planned low-price new model is a hot seller in 2025.
“I’m not arguing Tesla should trade there,” adds Black. But that price-to-earnings ratio “isn’t crazy if you believe go-anywhere unsupervised [self-driving] is around the corner and only Tesla can deliver it.”
Along with a new model, Tesla plans to launch a self-driving robotaxi service in late 2025.
Results from the PE-related analysis are mixed. None of it means Tesla shares will rise or fall in the coming months. Every situation is different.
Tesla’s 2022 stock performance was impacted by CEO Elon Musk’s purchase of then-Twitter (which is now X). Meanwhile, Tesla volumes grew rapidly in 2022 and 2023, but EV prices started to fall amid rising interest rates and more competition. Early in 2022, shortly after the record close, Wall Street expected Tesla to earn about $5 a share in 2023. It ended up earning just over $3 a share. Times were getting tougher.
Earnings—and earnings expectations—always drive stock prices and are other factors for investors to consider. Today, investors expect Tesla to earn about $4.25 in 2026.
The direction of that 2026 estimate will probably be the biggest factor in how the stock trades later in 2025. Tesla has its new lower-priced model and robotaxi service planned for 2025. Both things could be powerful tailwinds to estimates.
If estimates rise, investors will still have to decide what to pay for Tesla’s earnings. That debate will never end.