Tesla's stock price reaches a 13-month high during a post-earnings rally.

• On Friday, Tesla's stock increased by almost 3%, bringing it close to its highest market value since September of the previous year.
• After reporting better-than-expected earnings and CEO Elon Musk offering an optimistic projection for 2025, the company announced a two-day pop.
• Tesla shares are still about 35% below their 2021 record.

The stock price of the electric vehicle company reached its highest close in over a year on Friday, one day after its strongest rally since 2013, as investors and analysts praised the company's third-quarter results.

On Friday morning, Tesla shares increased by 2.8%, reaching $267.79, and are now on track for their highest finish since September 2023. Despite the two-day gain, the stock still lags behind the Nasdaq's 24% increase, with a year-to-date increase of about 8%.

Piper Sandler analysts raised their price target for the stock to $315 from $310 after Wednesday's earnings report, citing higher deliveries and margins.

On Thursday, Tesla's shares surged 22%, marking their second-best performance since their IPO in 2010. Despite missing analysts' revenue expectations by $190 million, Tesla reported a 8% increase in revenue compared to the previous year. Additionally, Tesla's earnings per share of 72 cents, adjusted, exceeded the average analyst estimate of 58 cents.

Tesla's earnings and cash flow were significantly impacted by $1.065 billion in revenue from environmental regulatory credits and FSD, the company's Full Self-Driving Supervised system, according to JPMorgan Chase analysts. However, they noted that the revenue from environmental regulatory credits may not be sustainable in the long run.

According to CEO Elon Musk, his "best guess" is that vehicle growth will be between 20% and 30% next year, due to lower-cost vehicles and the advent of autonomy. Analysts surveyed by FactSet were expecting delivery growth of approximately 15% for 2025.

Tesla plans to start production of its Cybercab, a robotaxi with butterfly doors and no steering wheel or pedals, by the end of 2026. Additionally, Musk stated that Tesla would conduct driverless ride-hailing in California and Texas next year in its existing cars, which are not currently safe to use without a human driver ready to steer or brake at any time.

Musk's net worth has increased by $30 billion after the two-day rally, bringing it to approximately $274 billion, according to Forbes. This puts him $60 billion ahead of the world's second-richest person, Larry Ellison, who is a former Tesla board member and a close friend of Musk.

Despite Tesla's stock being about 35% below its all-time high reached in 2021, the company had a challenging first quarter of 2024, with year-over-year deliveries declining and consumers increasingly choosing EVs from a range of competitors.

The competitive risks remain.

In China, companies such as BYD and Geely, along with new generation automakers like Li Auto and Nio, have been increasing sales. Meanwhile, in the U.S., legacy automakers Ford and General Motors are beginning to sell more electric vehicles, despite previously abandoning their electrification plans.

Tesla has consistently missed its deadlines for bringing products to market, according to Musk. Bernstein analysts wrote in a note after earnings that Musk has a history of being overly optimistic about FSD, and that research shows Tesla is lagging behind its competitors on robotaxis.

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