Tesla Powers Ahead—But Can Bulls Keep the Charge?

Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in TSLA.

More Than Just a Car Company, But How Far Can it Go?

Tesla reported its Q3 2025 earnings on October 22, 2025, marking a return to year-over-year revenue growth after two consecutive quarters of declines. The company achieved record quarterly vehicle deliveries of 497,099 units against production of 447,450, driven by strong demand for the refreshed Model Y across all regions.

Total revenue reached $28.1 billion, surpassing Wall Street expectations of around $26.3 billion and reflecting a 12% year-over-year increase, bolstered by robust performance in the energy storage segment, which grew 44% year-over-year and now accounts for about a quarter of overall revenue, with 12.5 GWh deployed.

Automotive margins improved slightly to 15.4% (excluding credits), and the company generated record free cash flow of nearly $4 billion alongside operating cash flow of $6.2 billion, ending the quarter with a substantial $41.6 billion in cash, equivalents, and investments.

But traders’ attention is shifting beyond cars. Tesla’s AI and robotics ambitions—especially the humanoid Optimus project—are starting to take center stage. Each capability update is fueling speculation that Tesla’s long-term upside may hinge less on vehicles and more on automation.

Traders that see new all-time highs on the horizon could find a trade with Direxion’s Daily TSLA Bull 2X Shares (Ticker: TSLL), which seeks daily investment results, before fees and expenses, of 200% of the performance of Tesla, Inc. common stock (Ticker: TSLA).

Below is a daily chart of TSLA as of October 23, 2025.

Source: TradingView.com

Candlestick charts display the high and low (the stick) and the open and close price (the body) of a security for a specific period. If the body is filled, it means the close was lower than the open. If the body is empty, it means the close was higher than the open.

The performance data quoted represents past performance. Past performance does not guarantee future results.

EV Credit Risks

Despite the earnings beat, net income fell 29% year-over-year to $1.4 billion amid a 40% drop in operating profit. Automotive revenue grew only 6% year-over-year, hampered by a persistent sales slump in Europe due to intensifying competition from rivals like BYD and Volkswagen, as well as consumer backlash tied to CEO Elon Musk's activism.

Year-to-date through Q3, total deliveries were still down about 6% versus the prior year, as the October 1 expiration of the U.S. federal EV tax credit and roughly $400 million in tariff impacts across automotive and energy divisions added to the headwinds.

The October 22 earnings call offered little near-term guidance, with management emphasizing long-term initiatives like the robotaxi platform and Optimus AI development. The market’s reaction was muted, with shares slipping roughly 3–5% post-earnings as traders looked for clearer timelines on next-generation products and production ramp-ups.

Following the Federal Reserve’s rate cut on October 29, Tesla shares initially saw a modest bounce, but momentum quickly faded—suggesting that lower borrowing costs alone may not be enough to reignite demand.

If that weakness persists, traders expecting further downside may look to Direxion’s Daily TSLA Bear 1X Shares (Ticker: TSLS), which seeks daily investment results, before fees and expenses, of 100% of the inverse performance in common shares of Tesla, Inc. (Ticker: TSLA) to position tactically for potential follow-through selling.

Whether the next move comes from lower rates or AI hype, traders can find ways to double down or bet against Tesla’s volatility* through TSLL and TSLS.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with TSLA and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with TSLA and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to TSLA is impacted by TSLA’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to TSLA at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to TSLA increases on days when TSLA is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with TSLA and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to TSLA is impacted by TSLA’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to TSLA at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to TSLA increases on days when TSLA is volatile near the close of the trading day.

Tesla Investing Risk — Tesla, Inc. faces risks associated with future growth and success of consumers' demand for electric vehicles; increasing competition; variability in the market for electric vehicles; potential delays in developing and launching new products; mismatches between supply and demand for the products; charging networks may be difficult to establish; product liability claims; cyberattacks; financial costs; system security and data breeches; as well as the risks related to the fact that communications from Mr. Musk to the public may significantly impact the trading price of TSLA. The trading price of TSLA has been highly volatile and could continue to be subject to wide fluctuations in response to various factors.

Consumer Discretionary Sector Risk — Companies in the consumer discretionary sector are tied closely to the performance of the overall domestic and international economy, including the functioning of the global supply chain, interest rates, competition and consumer confidence.

Automotive Companies Risk — The automotive industry can be highly cyclical, and companies in the industry may suffer periodic operating losses. Automotive companies can be significantly affected by labor relations, fluctuating component prices and supplier disruptions.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily TSLA Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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