Tesla shares have surged 32% since the end of August, far outpacing the S&P 500’s modest 3% gain.
According to a Barclays report released Monday, the rally is driven by strong delivery expectations, upbeat third-quarter earnings forecasts, and rising excitement ahead of Tesla’s November 6 annual meeting. Analysts also pointed to Elon Musk’s increased involvement as a key factor fueling investor sentiment.
Barclays argued that Tesla’s outperformance is not solely based on fundamentals. The analysts said Tesla is still viewed as the “original meme stock,” with its performance amplified by technical market factors such as options activity, retail trading enthusiasm, and momentum from the ‘Magnificent Seven’ tech stocks.
This mix of retail excitement and technical positioning has boosted Tesla’s valuation significantly. Barclays highlighted that the stock is currently trading at a stretched 180x 2026 price-to-earnings multiple, showing a clear disconnect between valuation and near-term earnings.
Looking ahead, Barclays expects Tesla to beat on third-quarter deliveries, but they also warned that the market may already be pricing in that outcome, suggesting the possibility of a short-term pause.
Still, the analysts said the November 6 shareholder meeting could act as another major catalyst, with expectations that Elon Musk will present a stronger growth narrative and further energize investors.
Barclays concluded that Tesla’s September rally is being driven by a re-engaged Elon Musk, favorable delivery data, and the stock’s continued role as a meme favorite among traders.
