Tesla (TSLA) stock might seem like it’s hit a rough patch, but I don’t think that’s an accurate read. Just a few months before the stock’s recent 50% slide, it had nearly doubled in value following Trump’s election win—driven by optimism around looser autonomous driving regulations. Since then, a reality check has kicked in. The market has corrected, and investors have reined in those initial hopes. The Trump administration isn’t made of miracle workers, and Tesla’s autonomy roadmap will take time to deliver. However, the Tesla-bashing that ensued on the back of questionable comments from Elon Musk is now fading.
Given the confluence of market factors in relation to internal performance, I’m very bullish on Tesla right now. Morgan Stanley analyst Adam Jonas agrees, maintaining his bullish stance on TSLA and announcing a Buy rating earlier this week.
While other companies are focused on short-term product plays, Tesla is deliberately investing in its long-term competitive edge. Musk is playing the long game—investing in the future while others chase today’s cash flows. Personally, I’d rather own a company betting on structural dominance than one fighting for near-term wins.
Market Fear Spells Opportunity
Since late February, Tesla shares have taken a hit, giving up most of the post-election “Trump bump.” A few things contributed to that drop—one being regulatory challenges in Europe. Vehicle registrations reportedly fell more than 40% year-over-year. That decline has been tied to rising competition and some reputational setbacks. While some have linked this to Musk’s political leanings, it’s worth pointing out that Tesla itself isn’t directly involved in politics.
In Q4 2024, Tesla also introduced aggressive price cuts and incentives, driving record vehicle deliveries, but margins took a hit. However, the recent stock price pullback has more to do with sentiment and macro headlines than Tesla’s actual fundamentals. It’s not just Tesla—much of the U.S. market has been caught in a correction. Trump’s proposed tariffs have spooked investors, and Tesla is one of the names that could feel the brunt of that if macro policy isn’t handled well.
That said, I see this as a significant buying opportunity. When I first bought into TSLA, the stock was trading at its 200-week moving average—a key level indicating fair valuation by historical standards. The stock’s 14-week Relative Strength Index (RSI) also sat at around 40, which is another signal that it was reasonably priced.
Importantly, for long-term big-picture investors, we must remind ourselves what gives Tesla such long-term potential: its Cybercab initiative is a game-changer. Instead of selling an electric vehicle for $75,000 once, Tesla could turn that same vehicle into a revenue-generating service, bringing in tens of thousands of dollars a year. That’s a massive shift in commercial approach and margin dynamics.
Then there’s Optimus—the company’s humanoid robot project. It might take longer to scale, but it adds yet another layer to Tesla’s path toward becoming the dominant player in real-world AI. In my view, this combination sets the company up for long-term exponential compounding, so I intend to hold my position through whatever volatility may arise.
Tesla Stock Offers Growth at a Reasonable Price
Following the recent sell-off, Tesla’s forward price-to-earnings and price-to-sales multiples are still elevated in absolute terms—but they’re much lower than their historical highs. Meanwhile, revenues continue to rise. Moreover, consensus estimates peg Tesla’s upcoming full-year normalized earnings per share around $2.50, representing roughly 10% year-over-year growth. For FY26, the estimate jumps to over 30% growth.
That’s why I’m buying while others are backing off. Even now, Tesla continues to generate solid free cash flow. Its FY24 cash and investments total reached $36.6 billion—up $7.5 billion from the year before. That kind of balance sheet gives Tesla the freedom to invest heavily in R&D for Optimus, Cybercab, as well as other tech-autonomy projects. And that’s exactly what Tesla’s doing—deploying capital to build technologies with asymmetric upside over the next decade.
I think Tesla is also well positioned for a rally in H2 2025 and H1 2026 in the near term. If the Fed’s dovish interest rate intentions play out, that could unlock pent-up demand for vehicles and fuel a broader rotation into growth stocks. Moreover, it would create a tailwind for Tesla’s valuation. From my perspective, the post-election rally and subsequent decline were both driven by sentiment. Now that the dust has settled, TSLA stock is priced to attract value buyers seeking to buy the dip.
Is Tesla a Buy, Sell, or Hold?
Wall Street is currently neutral on TSLA stock. The consensus rating is Hold, with 14 Buys, 11 Holds, and 11 Sell ratings assigned over the past three months. The average TSLA price target is $335.89 per share, which implies a 23.5% upside from current levels.
Expensive Stock Finally Cheap Enough to Buy
Tesla isn’t my most prominent position—it’s still a high-risk, high-volatility stock. However, the long-term trend looks very promising for investors who can stomach the swings. More importantly, after being overpriced and overvalued for months on end, TSLA stock is now trading at bargain-basement levels compared to the frothy valuation in 2024.
For existing shareholders, buying more stock at current levels helps to reduce the average price of their total holding. I intend to hold onto my position regardless of the market noise, including political wrangling and counterproductive PR snafus on behalf of the company’s enigmatic frontrunner, Elon Musk. With substantial potential returns on the horizon, I don’t want to miss out on what could be one of the most influential tech stories of our generation.