Tesla stock jumps 3%, market cap near all-time high; What is fuelling the comeback?

Tesla stock gained after CEO Elon Musk revealed he purchased about 2.57 million shares in the open market on September 12. The purchase cost roughly $1 billion and is Musk’s first open‐market buy of Tesla stock since 2020. Investors took this as a strong signal of confidence.

This move caused Tesla share price to jump more than 3% on September 15, as per Google Finance, pushing the stock back into positive territory for 2025 after a rough start. The company’s market cap surged to $1.32 trillion, closing in on its all-time peak of $1.42 trillion, according to Companies Market Cap.

Let’s break down exactly why the Elon Musk-led EV maker’s stock is rallying right now, what this means for investors and what to watch ahead.

Why is Tesla stock rallying right now?

• Musk’s insider purchase: Musk buying $1 billion worth of the shares is rare. Such massive insider buys often scream “undervalued.
• Commitment: Amid concerns about Tesla’s dipping demand, rising competition, and Musk’s distractions (X, SpaceX, AI, politics), Musk’s stock purchase serves as a reminder that he is committed to Tesla.
• Musk’s $1 trillion pay package: There is a pay plan for Musk that could be worth up to about $975 billion if Tesla hits major market value and operational goals.
• Tesla turns positive for the year: After being well in the red earlier in 2025 the stock is now green for the year. That gives investors hope that things might have bottomed and that recent weak quarters may be followed by improvement.

Why are Tesla investors feeling more optimistic?

• Musk’s stock purchase gives a belief that leadership is confident in the business and its outlook.
• The proposed incentive package gives Musk extra motivation to hit big targets so investors may feel his efforts will be more aligned with shareholder returns.
• Energy storage growth is a positive side story. Even though revenue fell in that segment it is delivering record high deployments.
• Stabilizing or improving deliveries could start turning negative trends around. If demand holds or improves the stock might ride that tailwind.

How are Tesla’s latest financial results shaping up?

Here are the most recent numbers from Q2 2025 along with what looks good and what is concerning:

Source: Tesla Q2 Earnings Report, Reuters

What risks could weigh on Tesla stock?

• Declining deliveries year over year could persist especially if EV subsidies shrink further or competition gets tougher.
• Lower regulatory credit revenue hurts profitability. Tesla earned far less from credits this quarter compared to last year.
• Margins are squeezed. With lower average selling prices, cost pressures and weaker revenue there is less room for error.
• Investor expectations may be high. The pay package looks big and performance goals tough. If Tesla misses there could be disappointment.
• Macroeconomic risks such as interest rates inflation or changes in government EV incentives remain big wild cards.

What should Tesla investors watch for?

1. Q3 2025 vehicle delivery numbers: Do they improve year over year or at least drop less than Q2?
2. Margin trends for the automotive business especially excluding regulatory credits and after costs of price reductions
3. Energy storage deployments and profitability of energy business including new products like Megapack or Megablock
4. Progress on robotaxi services autonomy newer models and any cost improvements or delays
5. How the proposed pay package is received by shareholders and what milestones are clearly defined and achievable

Is Tesla stock’s comeback justified?

Tesla’s recent gain, and its market cap moving near all-time highs has real triggers: Musk’s $1 billion buy, new performance based incentives, and modest signs of stabilization. However, the fundamentals still show strain from weaker demand, lower revenue and squeezed margins. Tesla’s cash reserves and growth in energy storage give the company some cushion.

For now, Tesla remains a high risk, high reward story, according to analysts. Based on consensus from 56 analysts on INDmoney, 42.86% recommend a ‘BUY’ rating for Tesla, Inc., with an average target price of $314.1.

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