Tesla Stock Is Jumping Today. Is the Stock a Buy Now That Elon Musk Plans to Step Back From DOGE?

Tesla (NASDAQ: TSLA) stock is seeing big gains in Wednesday's trading despite publishing disappointing earnings results yesterday after market close. The company's share price was up 7.2% as of 11:30 a.m. ET. Meanwhile, the S&P 500 was up 2.1%, and the Nasdaq Composite was up 3%.

Tesla stock is rocketing higher today thanks to a combination of macroeconomic and business-specific catalysts. Recent statements from President Donald Trump and other White House officials suggest a desire to de-escalate the trade war and could indicate that a deal with China on tariffs and other aspects of policy is a key near-term priority. The stock market is surging in response.

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News that CEO Elon Musk will be stepping back from the initiative called the Department of Government Efficiency (DOGE) is also helping to boost Tesla's valuation despite the company's concerning Q1 report yesterday. Even with today's rally, the stock is still down roughly 46% from the high it hit last year.

Is Tesla stock a buy right now?

Tesla is soaring thanks to hopes that Elon Musk's step back from DOGE and other political activities will strengthen the company's strategic direction and reduce pressures on the brand. Musk's relationship with the Trump administration appears to have created a significant drag on sales, and some investors and analysts have voiced concerns that the CEO has been too distracted to effectively lead the business. While a Musk move to focus on Tesla is likely to be a net positive, the electric vehicle specialist is still facing some big challenges.

Yesterday, Tesla reported that it had recorded non-GAAP (adjusted) earnings per share of $0.27 on revenue of $19.34 billion. The performance came in far worse than the average analyst estimate, which had called for per-share earnings of $0.39 on sales of $21.1 billion. On the other hand, a big sales and earnings miss was broadly expected, and the performance relative to the average Wall Street targets was skewed by some analysts not updating their estimates even as headwinds for the business became clear. But despite gains for the stock today, I think last quarter's results paint a clear negative picture and that shares are too risky right now.

Driven by a 20% decline in automotive revenue, Tesla's total sales fell 9% last quarter -- and net income plunged 71%. With the stock trading at very high forward sales and earnings multiples even in the face of steep performance declines, I think Tesla stock is too expensive to buy right now unless you anticipate the company's robotaxi services really making a splash this year.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.