Why Tesla Stock Was Climbing Today

Shares of Tesla (NASDAQ: TSLA) were moving higher today, overcoming a weak earnings report after CEO Elon Musk spent much of the earnings call pumping up the stock and making big promises about autonomy.

As of 1:11 p.m. ET, the stock was up 4.7% on the news.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

Image source: Tesla.

Investors buy into the autonomy story

Tesla's fourth-quarter numbers were disappointing and the stock was down initially after hours when it reported earnings.

For the full year, Tesla reported a decline in automotive revenue, and in the fourth quarter, overall revenue increased just 2% to $25.7 billion, which was well below the consensus at $27.1 billion. Automotive revenue was down 8% to $19.8 billion in the quarter.

On the bottom line, results also disappointed with operating margin down from 8.2% to 6.2%, while adjusted earnings per share rose from $0.71 to $0.73, missing estimates at $0.77.

Despite the weak results, investors still bid the stock higher after Musk made bold promises around autonomy and told investors that the stock could eventually be more valuable than the next five valuable companies combined.

The Tesla chief continues to be an evangelist for full self-driving and Tesla's autonomous vehicle technology, saying that 2027 and 2028 will be "ridiculously good." He also said of the technology, "The only people who are skeptical are those who have not tried it."

All-in on autonomy

Musk and the rest of Tesla management spent little time discussing the automotive business on the earnings call, instead focusing on autonomy.

Tesla didn't give specific guidance, but it did call for the vehicle business to return to growth in 2025, though it noted it wasn't fully switching new production to its next-generation platform, which means it won't be able to lower costs as much as it hoped.

The company still faces a lot of uncertainty in 2025, but investors seem to be buying into the autonomy story. If Tesla can take steps toward full autonomy, the stock could move higher, though it still faces considerable downside risk.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $320,756!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $45,331!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $527,508!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of January 27, 2025

Jeremy Bowman 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.