Tesla—the original “internet-famous stock” makes a strong comeback!
Tesla is reigniting market frenzy. Driven by Elon Musk’s renewed focus on the company’s business and the market’s optimistic expectations for upcoming delivery data, shares of the electric vehicle giant are experiencing a strong rebound, demonstrating its powerful market appeal as the “OG meme stonk.”
Since the end of August, Tesla’s share price has surged by 34%, far outpacing the S&P 500’s 3% gain over the same period. The core driving forces behind this rally come from investors’ anticipation that third-quarter deliveries will beat expectations, and Musk’s increasingly active stance—posting on social platform X “daddy is very much home,” and buying another $1 billion worth of company stock, signaling to the market that he will focus more on Tesla’s business.
However, this rally is not entirely driven by fundamentals. According to Chase Wind Trading Desk, Barclays analysts Dan Levy and Josh Cho wrote in a September 29 report that speculative factors have also catalyzed Tesla’s strong performance. Massive options trading, strong retail investor enthusiasm, and Tesla’s status as a “catch-up” member of the “Tech Magnificent Seven” all amplify the market’s optimism.
This frenzy has increasingly disconnected Tesla’s stock price from its short-term profitability. According to Barclays, the stock is now trading at 180 times projected 2026 earnings—a valuation that “is full of bubbles.” Although delivery data may bring short-term benefits, the market remains skeptical about the sustainability of such a high valuation.
CEO’s Return and Earnings Expectations Fuel the Stock
Expectations that Musk will refocus on Tesla’s business are the key narrative driving this rebound. Barclays analysts emphasize that Musk’s increased involvement is one of the most important developments of the past month. In addition to his signature social media posts and stock purchases, the market is also looking ahead to the Annual General Meeting (AGM) scheduled for November 6, where an ambitious growth blueprint is expected to be announced.
Meanwhile, positive short-term earnings data offer fundamental support for the stock’s rise. Barclays expects Tesla’s third-quarter deliveries to be between 465,000 and 470,000 units, much higher than the media’s estimate of 435,000 and Tesla’s own compiled market consensus of 443,000.
The analysts note that better-than-expected September sales in China, coupled with inventory depletion in the U.S. due to adjustments to the $7,500 EV tax credit policy, are the main reasons why deliveries may exceed expectations. However, they also caution that this positive factor may have already been priced in by the market.
The Technical Frenzy of the “OG Meme Stonk”
Beyond grand narratives and earnings expectations, Tesla’s share rally has once again revealed its typical traits as an “OG meme stonk.” The Barclays report points out that technical factors have played a significant role in this round of gains. The phenomenon known as the “Tesla-financial complex” has appeared again—that is, massive options trading activities exert disproportionate influence on the stock price and may even trigger a “gamma squeeze.”
Data show that the daily nominal trading volume in Tesla options has averaged about $130 billion over the past two weeks. Meanwhile, the ratio of call to put option volumes has risen to 1.6 times, higher than the 2024 average of 1.4 times, reflecting investors’ strong intent to chase the rally with leverage.
In addition, retail investors are a force to be reckoned with for Tesla, with their share holdings estimated at over 30%. This trading behavior, driven by “animal spirits,” is similar to the performance seen in cryptocurrencies such as Bitcoin.
Prior to this rally, Tesla was lagging behind other members of the “Tech Magnificent Seven.” As of the end of August 2025, Tesla’s share price was down 17% for the year, while Nvidia, Meta, and Microsoft were up 30%, 26%, and 20%, respectively.
However, since September, Tesla’s shares have rebounded strongly, becoming the best performer among the “Tech Magnificent Seven,” rapidly closing the gap with its peers. Although Tesla’s annual gains remain behind those of Nvidia and Google, it has overtaken Amazon and Apple. Barclays believes that some capital rotated out of other tech giants into Tesla, which formed another driving force for this surge.
Valuation Disconnected from Fundamentals
Despite exuberant market sentiment, analysts remain cautious about Tesla’s high valuation. Barclays compares Tesla’s 180 times projected 2026 price-to-earnings ratio to the S&P 500’s 23 times, clearly pointing out that the valuation is “severely disconnected” from fundamentals. The report says that although delivery data are strong, the company’s overall fundamentals remain “weak.”
It is also worth noting that the much-watched autonomous taxi project has seen no substantial progress announced in recent months, which is one of the key stories underpinning Tesla’s long-term high valuation. Barclays maintains an “equal weight” rating on Tesla, with a target price of $275—significantly below the current trading price above $440.
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The above content is from Chase Wind Trading Desk.
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