Katina, Wednesday, December 17, 2025 - Tesla's shares have risen more than 26% since their low on November 21, as investors remain excited about artificial intelligence and self-driving despite declining sales.
The stock also outperformed the Bloomberg index of the largest seven, which rose less than 6% during the same period.
Optimism is centered around CEO Elon Musk's ambition to transform Tesla into a leading force in robotics and artificial intelligence, a thriving technology that has driven global stocks to all-time highs.
The company's push towards self-driving vehicles has also received praise from analysts, with some stating that Tesla will be a "game changer" in this field.
Other initiatives by Musk include a potential initial public offering for rocket and satellite maker SpaceX, a company he said is converging with Tesla.
Sentiment around self-driving cars may also be bolstered by Waymo, Alphabet's self-driving unit, which is in discussions to raise over 15 billion dollars at a valuation of nearly 100 billion dollars.
However, Tesla faces several hurdles in its business outlook. Sales in California are set to be suspended for 30 days if the company does not change its marketing practices that are alleged to mislead consumers about its driver assistance technology.
At the same time, recent quarterly results have disappointed investors as rising costs impacted a record quarter in vehicle sales.
The stock is trading at a staggering forward price-to-earnings multiple of 223, which is much higher than the five-year average of 94, according to data collected by Bloomberg.
The broader Bloomberg index of the largest seven carries a price-to-earnings ratio of 31.
Tesla's stock rose by 1% on Wednesday morning.