Why Tesla Is the Most Expensive—and Shorted—Stock in the M7

 

Tesla stock rose early Thursday. It’s the most expensive, and heavily shorted, stock among the Magnificent Seven.

Shares of the electric-vehicle maker were up 0.5% at $349.35 in early trading, while the S&P 500 and Dow Jones Industrial Average were up 0.3% and 0.4%, respectively.
 

 

There wasn’t much to pin gains on. No analyst reports or upgrades. 

Barid analyst Ben Kallo, however, published his short interest update for companies he covers on Wednesday. Short sellers borrow stock they don’t own and sell it, hoping to buy it back to repay the stock loan at a lower price in the future.

About 80 million shares of Tesla have been sold short, or about 3% of the shares available for trading. That’s higher than the roughly 1% average short interest in the rest of the Magnificent Seven stocks, but Tesla’s short interest has been stable in recent months, with no significant increase or decrease.

One reason for higher short interest is valuation. Tesla is the most expensive of the Mag 7 by a long shot. It trades for about 140 times the estimated calendar year 2026 earnings. The other six trade for closer to 29 times.

Tesla eked out a 0.2% gain on Wednesday, following Oracle’s blowout quarterly results that sent its shares up 36%. Investors weren’t ready for how big Oracle’s AI business is getting. Contracted backlog rose to $455 billion at the end of August, up from just $138 billion at the end of May

Coming into Thursday trading, Tesla stock was down about 14% this year but up 52% over the past 12 months.