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Tesla’s shares were the best performers in the Magnificent Seven in the third quarter.
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Shares of Tesla retreated Thursday even after the company turned in third-quarter deliveries that came in stronger than Wall Street anticipated.
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But looking back, investors have been baking all kinds of optimism into Tesla’s valuation lately; the EV maker’s shares outperformed the rest of the Magnificent Seven in the third quarter.
Tesla’s stock isn’t having a big day today. Given its recent performance, it can probably be excused.
Shares of the Magnificent Seven stock and electric vehicle maker were down about 3% in recent trading as the broader tech sector rose, and after reporting third-quarter deliveries that, at 497,000, exceeded Wall Street’s expectations as measured by Visible Alpha. (The mean forecast was around 440,000; it’s generally believed that the expiration of federal subsidies has pulled some EV demand forward.) Tesla’s third-quarter earnings are now set to land Oct. 22.
Given the outperformance, one might have expected a more dramatic reaction to the deliveries news—though Tesla’s (TSLA) shares have been delivering for a while now. The stock has powered off 2025 lows seen in March, turning in the best third-quarter performance of any Magnificent Seven stock with a 40% climb.
Though Tesla’s stock didn’t move much after its better-than-expected deliveries report, the shares have had a remarkable runup in recent months, as bulls shift much of their focus from sales of electric vehicles to Elon Musk’s compensation package, robotaxis and AI.
That’s happened as CEO Elon Musk has encouraged investors to look toward its developing business lines, including robotaxis, autonomous driving systems, and robotics, as the more important drivers of the company’s value than auto sales. (Some of the incentives in Musk’s massive proposed pay package point in that direction, too.) Reports indicate that Tesla will expand its robotaxi trials to another state.
Wall Street analysts, meanwhile, have been gradually lifting their price targets—though the average, according to Visible Alpha, is still roughly $100 below current prices. Wedbush’s Dan Ives, among the biggest bulls around, on Thursday said an “AI valuation will start to get unlocked in the Tesla story, and we believe the march to an AI-driven valuation for Tesla over the next 6-9 months has now begun.”
Investors have been buying in—even if today’s modest move doesn’t show it.
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