Tesla (NASDAQ:TSLA) has been reinvigorated in the past month after the stock bottomed out this spring and has managed to turn a corner. TSLA stock is up 26.4% in the past month, something bulls say is due to Elon Musk refocusing on his companies and a new push towards AI/robotics.
However, that does not encapsulate the whole story, considering revenue declined 11.8% in Q2 2025 with net profit margin declining 5.1% to 5.21%.
There’s solid evidence that investors are seeing Tesla through a new lens, and it is proving naysayers wrong. Most of Tesla’s fundamentals have long relied on the company’s electric vehicle segment, but Elon Musk has managed to quickly move the needle on Tesla’s robotics and AI offerings. The conversation has also shifted.
TSLA stock is off just 8.7% from its all-time high. Can it get there and beyond to $500? Let’s take a look.
The market is more suggestible than you think
The two earnings reports in 2025 have been nothing short of a disaster for Tesla… but not for the stock. Elon Musk has managed to convince the market that the future lies in robotics and AI, something Tesla may ostensibly crack in a few short years.
Optimus Robots hitting the market with a $30,000 price tag and doing all your chores for you may not happen by 2030, or maybe even 2040. However, the promise alone can be sold at a high multiple in the current environment.
This means the market can tolerate Tesla’s EV segment underperforming if Musk keeps making progress on AI and robotics.
And Tesla could turn a corner with EVs, too.
What could nudge Tesla to a new all-time high
I believe the worst is over for Tesla’s EV segment. The company recently introduced new and cheaper Model 3 and Model Y vehicles. On top of that, Musk has largely faded into the background politically after departing from DOGE, and vandalism has more or less disappeared.
Plus, the Federal Reserve has restarted interest rate cuts, and with record tariffs, it can compete better relative to other vehicle-makers in the U.S.
If Q3 shows that all of this coincides with a perfect storm for the EV segment and sales growth turns solidly positive, the market is likely to take TSLA stock to a new all-time high.
The losses in previous quarters also make it easier for Tesla to present better year-over-year financials in the coming quarters.
Should you buy TSLA stock below $500?
I expect TSLA stock to do well through Q1 2026. The environment is conducive for a sustained rally through $500, especially if the EV segment shows signs of a revival.
That said, TSLA stock is ahead of the curve today. The fair value is likely ~$250 if you strip out the AI hype and look at just the fundamentals. This company has a chokehold on EVs in America, but that does not justify paying 178 times 2026 earnings.
You need to believe Tesla solves unsupervised FSD and scales Robotaxi before 2027, and that auto margins bottom soon. That’s a plausible scenario, but at today’s price, you’re paying as if it’s already happened. A 20-30% broad-market drawdown would likely take TSLA well below $250.
I would still tag it a moderate buy, as I see enough momentum for the stock to ride along with the broader AI and tech sector. You should treat TSLA stock as a high-beta AI proxy rather than the car company it actually is. If AI/robotics hype slows down earlier than expected, $500 may not happen.
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