Tesla stock (TSLA) is back on a tear. After a rocky start to the year, the electric-vehicle maker has surged 45% since July, easily topping the Magnificent Seven and proving it still belongs in the club of tech giants. Microsoft (MSFT), by contrast, is struggling to keep up.
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Analysts Fuel Tesla’s Rally
Tesla shares gained another 1% in premarket trading Tuesday, following a 1.9% rise on Monday. The latest lift came after Mizuho’s 5-star analyst Vijay Rakesh raised his price target to $450 from $375, citing a stronger-than-expected 2026 outlook. Analysts also flagged the possibility that Tesla could hike prices on some models next year, adding to the bullish case.
On top of that, UBS issued an upbeat note projecting Tesla’s third-quarter deliveries at 475,000 vehicles. This would be about 8% higher than Wall Street’s consensus estimate and potentially the strongest U.S. quarter since mid-2023. UBS said the rush is being driven by American buyers eager to lock in the $7,500 IRA tax credit before it expires at the end of September.
“We believe 3Q25 could be the highest quarterly U.S. deliveries since mid-2023 and potentially the highest ever,” analyst Patrick Hummel wrote.
From Laggard to Leader
Tesla had been the laggard of the Magnificent Seven earlier this year, sliding more than 20% in the first six months of 2025. But since July, momentum has flipped. The stock has rallied 45% in less than three months, leaving the wider Mag 7, up 20% in the same stretch, trailing far behind.
The rally isn’t just about fundamentals. Elon Musk has kept investors engaged with a $1 billion stock purchase, a new compensation proposal, and bold updates on robotaxis and humanoid robots. Add in a Federal Reserve rate cut, which makes financing new cars easier, and Tesla suddenly looks unstoppable again.
UBS summed it up, “When it comes to Tesla, the market is not focused on valuation and rather looking at incremental headlines—which have been, and could continue to remain, positive.”
Microsoft Stumbles in Comparison
While Tesla shines, Microsoft is dimming. The stock has gained less than 5% since July 1, making it one of the worst performers in the so-called “Elite Eight,” a group that includes the Magnificent Seven plus Broadcom (AVGO).
“Microsoft is the worst Elite 8 performer so far this quarter,” analyst Ben Reitzes of Melius Research wrote, pointing out that Alphabet (GOOGL) has surged 45% in the same period.
The underperformance comes despite Microsoft posting a strong June quarter and upbeat guidance for its Azure cloud business. Reitzes suggested that uncertainty around Microsoft’s long-term relationship with OpenAI may be weighing on sentiment. Still, he expects momentum to improve later this year: “Checks on Microsoft’s Azure are showing no slowdown and Microsoft should make some compelling announcements in November.”
Key Takeaway
Tesla has reclaimed its place as one of the market’s hottest megacaps, fueled by bullish analyst calls, stronger delivery forecasts, and Musk’s ever-present ability to command attention. Microsoft, meanwhile, has slipped into the role of laggard, but analysts aren’t counting it out yet. With fresh Azure updates on the horizon, the race among the tech elite is far from settled.
Investors can compare both stocks side-by-side based on various financial metrics and analyst ratings on the TipRanks Stocks Comparison Tool. Click on the image below to find out more.
