Tesla Inc.'s shares are on the move again, climbing nearly 30% this month and reversing much of its 2025 slump. The stock, in September alone, has risen from $325 levels at the start of the month to presently hovering around the $420-mark.
The scrip is close to doubling its value as compared to the lows of March, when it was trading at around $222.
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From being one of the weakest names in the "Magnificent 7" earlier this year, Tesla's September surge has once again put it back in the spotlight and back on investors' radars
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Here are three factors driving the rebound:
Renewed Faith In Tesla's Future Bets
Even as demand concerns weigh on its core EV business, Tesla is winning attention for its robotics initiatives and advances in autonomous driving. The cooling of CEO Elon Musk's public spat with President Donald Trump has also reassured investors, reducing the risk of losing valuable EV subsidies. Meanwhile, Tesla's board approving a fresh pay package for Musk has helped ease uncertainty about his long-term commitment to the company.
This certainly comes as a shift from recent sentiment surrounding the company, where financials group Macquarie's Large Cap Growth Fund in its Q1 2025 investor letter had credited its decision to avoid Tesla stock as a top contributor to returns. "Tesla faced well-publicised headwinds last quarter that may bleed into future periods," the fund wrote. "The business has never met our quality standards and we are happy to sit on the sidelines of this battleground stock."
Potential Short Squeeze In Play
The recent spike has stoked speculation of a "short squeeze," where short-sellers are forced to buy back shares to cover losses, adding more fuel to Tesla's upward momentum, as per media reports.
Market Tailwinds From Fed Optimism
With investors widely expecting a Federal Reserve rate cut next week, growth stocks are back in favour. Tech-heavy names like Tesla typically benefit from lower borrowing costs, and stronger-than-expected second-quarter earnings across sectors have further boosted confidence in the economy.
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