Tesla Stock Is Going Parabolic. Is Now the Time to Buy?
Key Points
For the last few weeks, the stock market has shown signs of strength as new trade deals come together in response to President Donald Trump's tariff policies.
In May, the S&P 500 and Nasdaq Composite rose 5% and 8%, respectively. Among some of the biggest gainers were artificial intelligence (AI) stocks, particularly those in the "Magnificent Seven." Within the Magnificent Seven, Tesla 's (NASDAQ: TSLA) 23% surge last month set it apart from its peers.
Let's dig into Tesla's recent surge and assess whether these gains are sustainable. Is now the time to get in on the action?
Tesla's price action is being driven by two things right now
Generally speaking, a company's share price should be driven by the performance of the underlying business. However, Tesla's business is not in the best shape right now. Its electric vehicle (EV) segment -- its core source of revenue and profits -- is decelerating, and rising competition from domestic manufacturers such as Rivian and overseas rivals like BYD are adding a new layer of complexity on the customer acquisition front.
But Tesla's stock price throughout 2025 has not been closely related to how the actual business is performing. Rather, investors have been both punishing and rewarding Tesla stock based on actions taken by the company's controversial CEO, Elon Musk.
For much of 2025, Elon Musk has had his focus diverted away from Tesla due to his role as a special government employee for the Trump administration, specifically in the Department of Government Efficiency (DOGE).
Musk's time in Washington has been polarizing, and his role with DOGE has contributed to Tesla's mounting challenges with consumer demand. As recently as mid-April, the stock was down over 50% from its all-time high.
It is against this backdrop that Musk recently announced he is stepping away from DOGE and turning his focus back to Tesla.
The timing of Musk's announcement appears quite strategic. One of the biggest potential growth catalysts for Tesla's future is the introduction of its autonomous driving fleet, dubbed Robotaxi . The service is scheduled to launch on June 12 in Austin, Texas.