- Tesla shares rallied 17% on Thursday after the company reported strong earnings.
- The carmaker reported better-than-expected auto margins and gave strong guidance for 2025.
Tesla investors are in a good mood after the firm's latest earnings report.
Shares of Elon Musk's carmaker rallied as much as 17% on Thursday as traders took in the firm's third-quarter financials, which showed that the company beat earnings while gross margins — a measure analysts have kept a close eye on — rose to 19.8%, better than the expected 16.8%.
Shares were trading around $250.30 shortly after the opening bell, with the increase marking of the largest gains for the stock in its history.
Analysts were upbeat after Wednesday's earnings report, which assuaged some doubts about Tesla's core car business after a rough start to the year amid sagging deliveries and lower demand in China.
The company issued better-than-expected guidance for 2025 deliveries, eyeing 20%-30% growth.
"Last night Tesla delivered an early Christmas present for investors as the bulls got a monster margin rebound and surprisingly strong delivery outlook for 2025, which we would characterize as an Aaron judge-like quarter and guidance," Wedbush Securities analysts said in a note on Thursday, adding that hurt profit margins have been the "major overhang" for Tesla over the last year.
Tesla's gross profit margins likely bottomed out in the first half of 2024 and are on track to surpass 20% in the fourth quarter, Morningstar said in a note.
Others on Wall Street, though, raised questions about other aspects of Tesla's business. Uncertainty still lingers about Tesla's full self-driving development, the timing of new models, and the outlook for producing and selling Optimus, the company's humanoid robot.
"While CEO Musk forecasted strong unit growth in CY25 and praised his company's opportunities in auto growth, FSD, and Optimus, we're left asking ourselves, 'where's the beef?'" Truist analysts wrote in a note, maintaining their "Hold" rating on the stock.
"TSLA offered no details on a CY25 model, no details on improved FSD, and no details on its plans for Optimus. Similar to our views post-Robotaxi day, we were left expecting more."