Tesla Inc TSLA stock is finally perking up, but the rally may be more mirage than miracle. After spending much of 2025 in the red, shares of Elon Musk‘s EV juggernaut have clawed their way back above $350, breaking through short-term moving averages.
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But technical strength doesn’t always equal conviction. This move may say more about Wall Street’s capital rotation than Tesla’s fundamentals.
Rotation In Full Swing
The so-called Magnificent 7 has lost some of its shine. Nvidia Corp‘s NVDA parabolic surge is cooling; Apple Inc AAPL and Microsoft Corp MSFT are drifting sideways, and investors seem eager to shuffle cash into laggards.
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Tesla, bruised and discounted compared to its $488.54 52-week high, has become a convenient rebound trade. With the stock now comfortably above its 50-day and 200-day SMAs (simple moving averages) and momentum indicators like the RSI (relative strength index) creeping toward 62, traders are betting on a tactical upside swing. Yet that momentum feels more like money in motion than renewed faith in Tesla’s growth story.
A Rally With Caveats
Tesla’s valuation, while less frothy than last year, still faces headwinds. EV adoption is slowing in key markets, Chinese rivals like BYD BYDDF and Nio Inc NIO are closing the gap, and aggressive price cuts have squeezed margins. This rally, fueled by technical tailwinds and Mag 7 fatigue, may prove fragile if sentiment rotates back toward AI leaders or semiconductor giants. Investors hoping for a thesis reset may be disappointed. The rally looks tactical rather than transformational.
For now, Tesla’s resurgence offers traders a tradeable bounce, but its staying power is unproven. Musk’s next big product announcement may not be the decisive factor. What’s driving Tesla’s chart may be Wall Street’s appetite for risk, not a sudden endorsement of Tesla’s fundamentals.
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