Checking your portfolio and seeing a sea of green next to TSLA can feel like a fever dream sometimes. Honestly, if you've been following the EV giant lately, you know it's been a bit of a rollercoaster. After a rough start to 2026 where deliveries fell short and the "Magnificent Seven" trade seemed to be cooling off, today’s price action has caught a lot of people off guard.
So, why is Tesla up today? It isn't just one thing. It's a weird cocktail of Elon Musk’s latest pivot on Full Self-Driving (FSD), some surprisingly beefy energy storage numbers that people finally stopped ignoring, and a classic "relief rally" ahead of the Q4 earnings report on January 28.
The FSD Subscription Pivot is Moving the Needle
The biggest spark right now is the buzz around Musk’s recent confirmation that Tesla is killing off the one-time $8,000 purchase for FSD. After Valentine's Day, it’s going subscription-only. You might think, "Wait, why would removing an $8,000 revenue chunk make the stock go up?"
Basically, Wall Street loves recurring revenue. It’s the "Netflix-ification" of cars. If Tesla can get 10 million people paying $99 a month, that is a massive, high-margin cash cow that doesn't depend on how many actual cars they bolt together in a week. Investors are betting that a lower barrier to entry (the $99 monthly fee) will skyrocket the attach rate. Plus, Musk’s 2025 performance award—the one shareholders approved with a massive 75% majority—is tied to hitting 10 million active FSD subs. Today, the market is starting to price in the reality that Tesla is becoming a software company that just happens to have wheels.
Energy Storage: The Silent Hero
Everyone talks about the Model Y and the Cybercab, but the Energy segment just dropped some serious weight. In Q4 2025, Tesla deployed a record 14.2 GWh of energy storage.
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That is a huge jump from the 12.5 GWh we saw in the previous quarter. While vehicle deliveries actually dipped year-over-year—falling to about 418,227 units—the battery business is growing like crazy. It’s finally reaching a scale where it can actually offset the "sputtering" (as some analysts call it) of the car sales. Analysts from firms like Baird and Wedbush have been screaming about this for months, but it feels like the broader market is only just now waking up to the fact that Megapacks are a serious business.
Why the Sentiment Flipped This Morning
- The NHTSA Extension: Tesla just got a five-week extension (until Feb 23) to respond to the FSD investigation. This takes some immediate "regulatory overhang" pressure off the stock for the next few weeks.
- The "Rotation" Narrative: There’s been a lot of talk about money moving into small-caps, but today we’re seeing a bit of a bounce back into high-beta tech.
- Short Covering: TSLA is a heavily shorted stock. When it starts to tick up on even moderately good news, short sellers often scramble to buy back shares to cover their positions, which just pushes the price higher.
Anticipation for Jan 28 Earnings
We are less than two weeks away from the big Q4 2025 earnings call. Usually, the stock gets jittery during this period. However, because the delivery miss was already "baked in" earlier this month, the bar for a "beat" is actually pretty low.
Investors are looking for one specific thing: Margin stabilization. If Tesla can show that the price cuts haven't totally gutted their profitability, the stock could have legs. Dan Ives over at Wedbush is still holding a $600 price target, though it’s worth noting that the "bears" like Gordon Johnson are still way down in the double digits. It’s a massive gap.
What Most People Get Wrong About the Recent Dip
A lot of the "Tesla is dying" headlines focused on the fact that BYD technically sold more EVs last year. Sure, that's a hit to the ego, but the market is starting to realize that Tesla is playing a different game. While BYD is winning on volume, Tesla is trying to win on AI and Robotics.
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The Optimus 3 robot is supposed to start scaling later this year, and while Musk’s timelines are... let's say "optimistic," the institutional money is starting to treat Tesla more like an AI play (similar to Nvidia) rather than a traditional automaker like Ford or GM.
Actionable Insights for Investors
If you're looking at why is Tesla up today and wondering what to do next, keep these three things in mind:
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- Watch the $448 Level: Technically, the stock is hovering near some key moving averages. If it stays above $450, it could signal a trend reversal.
- Monitor FSD Take Rates: The shift to subscription-only on Feb 14 is the "big experiment." Watch for any data on how many new users sign up for the $99 plan.
- Earnings Volatility: Expect a wild ride on Jan 28. If you’re not a fan of 10% swings in a single day, you might want to sit on your hands until the dust settles from the Q4 call.
The rally today is a mix of relief and a refocus on the high-margin future of the company. It’s sort of a "don't count them out yet" moment for the bulls.
To get a better sense of where the stock is headed, you should compare the upcoming Q4 margin data against the 16.6x sales valuation to see if the current price is actually sustainable in the long run.