Tesla stock’s up 98% since April. Is that a warning?

It may feel like it has been a quick year in some ways. On the other hand, though, the market mayhem that followed Aprilâs US tariff policy shifts now seems rather a distant memory to many investors. Take Tesla (NASDAQ: TSLA) as an example. Tesla stock slumped amid concerns about what tariffs might mean for it â but has risen a stunning 98% since April.

That sort of return is one many investors â including myself â would be more than happy with. Over five years Tesla has also done well, more than doubling.

But while Tesla stockâs near-100% gain in a matter of months is notable, I think it can also act as something of a warning to investors.

Big share price moves — exciting but worrying too

After all, why would any share almost double in eight months?

One answer could be transformational business performance.

Say a penny share mining company strikes gold at its only project or a small company lands a massive new contract. In such cases, a huge share price gain would not necessarily surprise me. After all, companies with small market capitalisations can be highly volatile.

But Tesla has a market-cap of $1.4trn. So back in April, it was already a huge company with a massive market-cap.

All shares can be volatile, but it is surprising to see a company of such enormous size almost double in value in just eight months.

2025’s been a challenging year for Tesla

Could exceptional business performance explain Tesla stockâs strong run since April? After all, this year has brought some very good news for the business.

Last quarter, for example, saw record vehicle deliveries and also record deployment of energy storage products by the company. Its AI development activities are also attracting more attention, thanks to an ongoing surge of AI interest among many investors.

The company has also moved forward on some potentially game-changing plans, for example trialling its self-driving taxis in select US markets.

Still, while there have been highs, there have been plenty of lows too. Those include dismal vehicle sales performance in the first half, the withdrawal of financially significant tax credits in the key US market, mounting electric vehicle competition and ongoing brand damage stemming from the Tesla bossâs high political profile.

Such problems can have very real impact for the business.

Take the recent quarter with its record-breaking sales volume as an example. Revenues rose 12% year-on-year, but operating income plummeted 40%, compared to the prior year period.

Hereâs my concern

Despite that plethora of challenges, Tesla stock has soared since April. The company now trades for 294 times earnings.

I thought Tesla was overvalued in April. I think its share price performance since then in the face of a raft of risks makes little if any rational sense.

To me, the Tesla stock price looks like it is being driven more by momentum than fundamentals. It looks badly overvalued. I will not be investing.

The post Tesla stockâs up 98% since April. Is that a warning? appeared first on The Motley Fool UK.

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C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.