Tesla (NASDAQ:TSLA) investors have been on a wild ride this week, kicked off by a brutal Monday sell-off that saw the stock plunge 15.5% – its steepest single-day drop since 2020. Yet, in true Tesla fashion, it didn’t stay down for long, bouncing back 12% in the days that followed.
Lately, sharp swings have become the norm for TSLA. Since hitting a peak on December 17, the stock has tumbled nearly 48%.
For anyone following current events, connecting the dots to understand what’s behind the stock’s implosion is hardly Sherlock Holmes material. The decline has coincided with Elon Musk’s increasing political activity, his controversial chainsaw approach to slashing federal spending as the head of DOGE, his support for far-right causes, and that infamous Nazi salute. This has been the backdrop for plummeting sales worldwide and widespread protests, with activists storming Tesla showrooms and cars being torched at a dealership in France.
Sentiment is now so low that even Wedbush analyst and long-standing Tesla bull Daniel Ives thinks a “moment of truth” beckons for Musk and Tesla stock. “Tesla investors are seeing patience wear thin as Musk is not reading the room,” says the analyst.
Musk’s actions aside, he has made few, if any, appearances at Tesla factories or manufacturing facilities over the past two months, and now “perception has become reality for Tesla shares.”
“If Musk continues to head down the DOGE path 110% and showing no attention to Tesla during this turbulent time then brand damage will become more pervasive as right now our work in the field shows less than 5% (very contained) of Tesla owners would second guess buying a Tesla again due to Musk,” says the analyst.
What’s required here is for Musk to “step up as Tesla CEO” just like he has down many times before when Tesla had been written off.
Yet, despite current issues, Ives implores investors to hold the line, laying out the bull thesis in no uncertain terms: “This is the start of the biggest innovation and technology cycle in Tesla’s history ahead over the next few years,” he says.
The first step is the release of a new model priced under $35,000 before summer, which Ives expects will help push the company’s delivery growth toward a 2 million annual run rate. Additionally, Tesla will launch unsupervised FSD (full self-driving) in Austin, Texas, in June, marking a significant step in its autonomous vehicle ambitions. Ives also expects other automakers will adopt Tesla’s FSD technology in the coming years, contributing to Tesla’s autonomous vehicle ecosystem. The company also plans to launch the Cybercab within the next year. “We believe autonomous and Optimus will represent 90% of the valuation of the Tesla story and create a company with a valuation that exceeds $2 trillion,” he confidently added.
That remains to be seen. For now, Ives rates Tesla shares as an Outperform (i.e., Buy), backed by a Street-high price target of $550, implying the shares will soar by a very optimistic 122% in the year ahead. (To watch Ives’ track record, click here)
The Street’s average price target is a more modest $331.07, yet that figure still makes room for 12-month returns of 33%. All told, the stock claims a Hold consensus rating, based on a mix of a fairly even 12 Buys, 12 Holds and 12 Sells. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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