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Tesla stock rallied above $368, but valuation remains stretched with a forward P/E above 140.
Global electric vehicle deliveries fell 13% in H1 2025, pressuring margins and profits.
Elon Musk is betting on artificial intelligence, energy storage, and robotics to drive Tesla’s next phase of growth.
Tesla stock has been very active in recent weeks. The share price closed at $368.81 on September 11, 2025, which marked a gain of about 6% for the day. This upward move allowed the shares to break above a technical level known as the “buy point” at $367.71, a sign that momentum is building.
Over the past twelve months, Tesla stock price has gained around 52%, showing strong growth over a longer horizon. However, on a year-to-date basis, it is still down nearly 14%. This mix of short-term recovery and longer-term volatility reflects the uncertain environment within which the company operates.
Tesla continues to be one of the most expensive stocks among large technology and automotive companies. The forward price-to-earnings ratio for 2026 is around 140 times earnings, which is far higher than most competitors.
Some analysts even calculate a trailing P/E close to 220, with a forward P/E near 188. This means that the Tesla stock price prediction in 2025 made by the investors sets very high expectations for the tech giant’s future growth. The company’s market capitalization currently stands at about $1.23 trillion, with the stock trading within a 52-week range of $212.11 to $488.54.
Analyst ratings on Tesla remain mixed, with the average price target near $301.93, which is below the current trading level. This shows that while the market is optimistic, professional analysts are more cautious about near-term upside.
The most recent quarterly results highlighted the challenges Tesla faces in its core automotive business. In the second quarter of 2025, revenue came in at $22.5 billion, which was down 12% compared to the same period a year earlier.
The automotive gross margin fell to 17.2%, lower than the 18.5% recorded last year. This decline was mainly caused by lower average selling prices and reduced regulatory credit revenues.
On the other hand, Tesla’s energy division showed better performance. The energy business achieved a gross margin of 30.3%, which was up from 24.6% in the previous year. Although the energy division is still smaller in scale compared to automotive, it is becoming an increasingly profitable part of the company’s operations.
Also Read: Tesla Master Plan IV: Elon Musk’s Bold Shift to AI and Robotics
The global electric vehicle market is growing, but Tesla is struggling to maintain its leadership position. In the United States, electric vehicle sales in August 2025 reached a record 146,000 units, representing nearly 10% of all car sales. Much of this surge was driven by the looming expiration of the $7,500 federal tax credit.
Despite this industry-wide growth, Tesla’s own sales in the US fell by 6.7% year on year, and its market share dropped to 38%, the lowest in eight years. Globally, Tesla’s deliveries declined nearly 14% in Q2.
The picture is similar in emerging markets. In India, Tesla launched in July 2025 but has only managed around 600 orders so far, far below expectations. For the first half of 2025, global deliveries fell 13% year on year to 721,000 units, while US deliveries declined 11% to 272,000 units.
This slowdown in sales has had a direct impact on profitability, with operating profit for the first half of the year falling from $2.8 billion in 2024 to just $1.3 billion in 2025.
Tesla is working hard to diversify beyond cars. One of its most important projects is the Megablock, a large-scale energy storage system that includes the Megapack 3. This system is designed to cut installation costs by up to 40% and shorten the time needed to put it into use by more than 20%.
Production is expected to begin in Houston by late 2026. Investors are paying attention to this development because Tesla’s energy storage business is now the company’s most profitable division.
Another major initiative is in artificial intelligence and chips. Tesla has designed a next-generation AI chip called AI5, which Elon Musk calls extremely powerful.
The company has already completed its design review and is hiring engineers for its silicon team. This effort shows Tesla’s focus on building its own technology to power self-driving systems and other AI applications.
Tesla is also pushing forward with robotics and autonomy. A new performance-based compensation plan for Elon Musk, valued at up to $1 trillion, ties his pay to achieving very ambitious milestones.
These include a future market value of $8.5 trillion, the production of 20 million vehicles, the launch of 1 million robotaxis, the deployment of 1 million Optimus humanoid robots, and 10 million paid subscriptions for Full Self-Driving software.
The plan is subject to a shareholder vote in November 2025, and while the goals are bold, they show Tesla’s long-term ambition.
From a technical perspective, Tesla’s stock recently broke through resistance levels around $357 to $358. Relative strength and composite ratings have improved, with a relative strength rating of 79, a composite rating of 60, and an earnings-per-share rating of 53. These numbers suggest that the stock is regaining strength after a period of weakness, although fundamentals are still mixed.
Despite the optimism around new technologies and business expansion, Tesla faces significant risks. The decline in vehicle deliveries is a major concern, especially as competition from Ford, General Motors, Hyundai, and other automakers intensifies.
Lower margins in the automotive segment put pressure on overall profitability, and high valuation levels make the stock vulnerable to corrections if growth slows further. Tesla’s ambitious projects in AI, energy, and robotics also carry execution risk, as any delays or setbacks could lead to investor disappointment.
On the positive side, Tesla’s expansion into large-scale energy storage and advanced AI chips has the potential to generate new sources of revenue and improve margins. The Megablock project could establish Tesla as a leading player in the global energy storage market. At the same time, success with the AI5 chip and Full Self-Driving subscriptions could open major opportunities in both consumer and enterprise markets.
The expiry of the US tax credit also temporarily boosted sales, which may improve third-quarter delivery numbers. Technical momentum and institutional buying interest could also support the stock in the near term.
For clarity, Tesla’s latest financial and market position can be summarized as follows. Revenue for the second quarter was $22.5 billion, a 12% year-on-year decline. Automotive gross margin was 17.2%, while the energy gross margin improved to 30.3%.
Global deliveries fell 13% to about 721,000 units, with US deliveries down 11% to 272,000 units. The company’s market value is around $1.23 trillion. The stock’s 52-week range is between $212 and $488.54, and the current price is $368.81. Analyst targets an average of $302, and valuation levels remain very high with a forward P/E ratio above 140.
Also Read: Elon Musk’s Net Worth Drops by $15.3 Billion After Tesla Stock Crashes
Tesla stock price today represents both opportunity and risk. On one hand, the company is building momentum in energy storage, artificial intelligence, and robotics, areas that could define the future of technology and transportation.
On the other side, declining car sales, shrinking margins, and high valuation levels create uncertainty. The near term will likely depend on whether Tesla can stabilize its vehicle sales while scaling up its new businesses. If the company executes successfully, the long-term outlook could be very strong.
If not, the stock may retreat toward analyst targets near $300. Tesla’s story remains one of the most closely watched in global markets, reflecting both its potential for transformation and the challenges of delivering on such vast ambitions.
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