I think it means (or close to) They are excited

It means "Are you excited?" or "Are you in high spirits?" The question is normally asked in a party, game or exciting events etc,

getting hyper!

テンション is literally, "tension." 上がっている means rising. So together, they mean "tensions are rising/mounting."

Masaya is right. I let my English get in the way. You should go with his answer!