Tesla Stock Soars Again Friday: Here’s Why the Rally Isn’t Slowing Down

Tesla shares ripped higher for the second consecutive session—defying gravity and skeptical analysts who've been calling this rally overbought for weeks.

Market Momentum Builds

Fresh institutional inflows flooded into growth names, with Tesla leading the charge as the ultimate tech-disruption play. Retail traders piled in, chasing the momentum and ignoring traditional valuation metrics—because when has that ever mattered in modern markets?

Short Squeeze Amplifies Gains

Heavy short interest got caught leaning the wrong way again, fueling a classic squeeze that added rocket fuel to the move. Bears scrambled to cover positions, creating that beautiful feedback loop where panic begets more panic—and more green on the screen.

Speculation Trumps Fundamentals

Let's be real—this isn't about delivery numbers or profit margins anymore. It's about narrative, momentum, and the relentless belief that tomorrow's price will always be higher than today's. Another day, another reminder that in today's market, storytelling often outperforms spreadsheets.

Image source: Tesla.

Tesla's growth engine isn't currently from EVs

Earlier this week, Tesla held an event in Las Vegas to introduce new products from its energy storage business, and it included a bit of a surprise. Its next-generation Megapack 3 energy storage system was introduced as expected. But the company also unveiled the new Megablock.

The Megablock combines several Megapacks along with electrical power system components. It's a pre-engineered system that Tesla says will lower costs and installation times for large-scale energy projects. Mike Snyder, Tesla's VP of energy and charging, also said that Tesla plans to build Megapack 3 in Houston starting late next year.

Tesla's energy storage business is thriving even as its electric vehicle (EV) sales are slumping. Energy generation and storage revenue jumped 18% year over year to $5.5 billion in the first half of 2025. At the same time, automotive revenue declined by 18%.

Tesla shares have rallied 15% over the last month. Much of that happened this week after the Las Vegas presentation, which was also streamed live on Tesla's X social media account. Investors had mostly been focusing on the potential of Tesla's robotaxi when it is launched in volume.

In the meantime, the energy business is growing into a more meaningful part of Tesla's revenue stream. That's enough to MOVE the stock much higher this week.