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Can a moonshot company escape its leader’s political baggage? What if the company’s success is in part bound up in that polarizing activity? Elon Musk is back in reassurance mode, professing his overarching vision and long-term goals for his car company that have little to do with car sales.
Tesla stock (TSLA) is up 25% over the past week, with the biggest boost coming after an all-hands meeting at the company that conveyed the sense that Musk is “back in the building,” with the CEO issuing a sermon to reassure his shareholding faithful.
Fast-tracking a private transportation transformation is at the heart of Musk’s plans for Tesla. But dreams of a fleet of millions of robotaxis and thousands of humanoid robots are becoming much harder to sell when Musk is busy slashing through Washington instead of shepherding a volatile brand.
Gutting a social media company and remaking it in your own image doesn’t have the same consequences as messing with the American social safety net. Trying to do to the federal government what Musk did to Twitter ended up tarnishing Tesla. Or, as Dan Ives, a prominent Tesla bull, put it, created “a brand tornado crisis moment.”
But hints of a comeback are already gathering. The company’s most outspoken backers see Musk placing his DOGE duties in better balance with his corporate responsibilities. And a resurgence of retail investor interest piercing through the doldrums highlights a defining trait of the ticker: convincing people that big things are coming.
As Nicholas Colas, co-founder of DataTrek Research, wrote earlier this month in a note to clients, Tesla is a “faith-based” stock. While all equities generally move up and down according to people’s belief in them, Tesla represents a pure example of faith investing because so much of its implied value is tied up in future endeavors. In Tesla’s case, that means future earnings from robotaxis, not present and near-term earnings from cratering EV sales in the US, Europe, and now China.
Looking at the stock through that lens helps explain why flagging sales in its third-largest market barely register on the stock chart. This week’s rally also coincided with some good news on tariffs, lifting the “Magnificent Seven.” But Tesla’s rise was particularly pronounced and continued Tuesday.
To say that investors aren’t paying attention to Tesla’s fundamentals isn’t quite right, either. What Tesla bulls and more sympathetic observers are arguing is that its “fundamentals” are bound up in tomorrow’s breakthroughs.
Take Cathie Wood, who told our colleagues why Tesla stock would be worth $2,600 — essentially adding a zero to the current level — within five years. That thesis is entirely underpinned by robotaxis, which Wood says will make up 90% of the company’s value. If she’s right, who cares about European sales?
It’s easy to see how this kind of “faith-based” investing comes dangerously close to blind trust. For many, it truly is as simple as “Musk, take the wheel.” And what critics view as a gimmick, the faithful instead grasp as Musk’s track record of innovation. When the line goes up, it’s hard to tell the difference. And maybe there isn’t one.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
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