The 5 key moments that turned around Tesla's year and pushed it back to record highs
Patrick T. Fallon / AFP
- Tesla stock has been on a wild ride this year, collapsing in the first quarter before rallying back to highs.
- The company has benefited from its affiliation with the roaring AI trade.
- Detailed below are five key events that helped turn around Tesla's fortunes in the stock market.
2025 has been a good year for comebacks.
We got the first "Final Destination" movie in 14 years. Future NFL Hall of Fame quarterback Philip Rivers unretired last week after nearly five years away. And of course you have Michael Burry ferociously blogging up a storm after an extended public absence.
The stock market has also seen its share of reclamation stories, with none more high-profile than Tesla, the eternal lightning rod.
After a post-election Trump bump in late 2024, the company endured a difficult first quarter. Shares were nearly cut in half as CEO Elon Musk pivoted to government work by spearheading DOGE, and as sales fell globally. It was a grim time for shareholders.
But the company was able to turn things around, and currently sits just below record highs. The chart below, and the accompanying sections, trace the timeline of Tesla's stock resurgence.
April: Musk steps back from DOGE
Investors were getting restless that Musk was too focused on Washington, and not focused enough on making EVs. Then, when he said he'd step away from DOGE, they breathed a collective sigh of relief, helping along a 25% rally over just four days.
May: Tariff tensions simmer
The US struck its first trade truce with China in May, with both sides agreeing to lower their respective tariff rates for a period of 90 days. The stock ended up rising 17% that week. There would be further agreements with China, but this initial one marked the biggest inflection point.
Early September: Tesla introduces possible $1 trillion pay package for Musk
The argument in favor of such a lucrative package was that the continued presence of Musk as CEO makes up a large chunk of the company's value.
Its introduction showed Tesla's board was serious about keeping him around, which pleased investors. Shares rallied 17% over the following week. The package was ultimately approved in November, which also pushed the stock higher.
Mid September: Musk buys back a bunch of shares
Talk about throwing fuel on the fire. Musk's decision to buy back $1 billion worth of Tesla stock ignited another leg higher, pushing shares 7% higher in a single session. They then climbed an additional 8% the following week.
Musk being willing to spend his own money on Tesla stock signaled confidence in the business, and comfort with valuation levels.
November: Fed comments clinch a December rate cut
The December rate cut may have come and gone as a relative formality, which makes it easy to forget that it was still in jeopardy as recently as mid-November. Then, New York Fed President John Williams sealed the deal with some commentary on Nov. 21. Tesla rallied sharply alongside the broader market, soaring 10% over the next week.
It's been mostly a straight shot higher to records since then.