Stock Recovers to $400 Mark After 8 Months
Market Sees Move as 'Vote of Confidence' in Future Growth
Some Raise Concerns Over Overheated Valuation
Tesla's stock, which had been stagnating, rebounded to the $400 level for the first time in eight months, buoyed by news of a large-scale share purchase by CEO Elon Musk. The market interpreted this major buy as a sign of confidence in Tesla's future growth potential and responded positively. However, some voices continue to raise concerns about the stock being overheated.
On September 15 (local time), Tesla closed at $410.26 on the New York Stock Exchange, up 3.52% from the previous trading day. This is the highest closing price since January 23 ($412.38), and the first time it has surpassed $400 since January 31 ($404.60), marking an eight-month high. Tesla's stock price has risen for five consecutive trading sessions since September 8.
The news of CEO Musk's large-scale stock purchase is believed to have boosted investor sentiment. According to CNBC, Musk bought approximately $1 billion worth of Tesla shares on September 12. This is his first open-market share purchase in five years and seven months, since he bought 200,000 shares (about $10 million) on February 14, 2020, and it is the largest purchase by amount to date.
Amid the surge in Tesla's stock price, Musk posted on X (formerly Twitter) an image showing Tesla's weekly stock gain, writing, "As foretold, Tesla rose $69 in a week to $420."
The market sees Musk's latest purchase as a display of confidence in Tesla's future growth. Tesla recently launched an autonomous taxi service in Austin, Texas, and plans to begin selling humanoid robots in 2026. Artificial intelligence (AI) innovation, autonomous vehicles, and robotics are areas that Musk has repeatedly emphasized as part of Tesla's future vision.
Dan Ives, Head of Global Technology Research at Wedbush Securities and a prominent Tesla bull on Wall Street, commented on Musk's stock purchase, saying, "This is an enormous signal of confidence for Tesla bulls and shows that Musk is doubling down on Tesla's AI bet."
Some in the market interpret Musk's large-scale stock purchase as a response to the massive CEO compensation plan being pursued by Tesla's board of directors.
Tesla's board plans to propose at the annual shareholders' meeting on November 6 a compensation package granting Musk $1 trillion (about 1,390 trillion won) in stock over 10 years in 12 stages through 2035. To receive the full amount, Musk must first raise Tesla’s market capitalization to $2 trillion and then achieve step-by-step targets, ultimately reaching $8.5 trillion.
Business Insider, a U.S. economic media outlet, highlighted that the compensation plan is based on performance targets, interpreting Musk’s stock purchase as a message that he believes the plan is achievable.
Concerns about Tesla's stock being overheated have also been raised. Tesla is trading at about 168 times its projected earnings for the next 12 months, far exceeding the average for other big tech companies such as Apple and Microsoft (about 28 times). Garrett Nelson, an analyst at CFRA, said, "The valuation burden is significant," downgraded his investment rating on Tesla to 'sell,' and set a target price of $300. Gary Black of Future Fund said, "I will wait until the stock falls below $240."
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