Tesla's Stock Tumbles in 2025: Market Focus Shifts to Fundamentals
Since the start of 2025, Tesla (TSLA) stock has plummeted by 28%, underperforming the broader market and its peers within the "Magnificent Seven" tech giants. The stock's decline follows a surge in enthusiasm surrounding Elon Musk's apparent proximity to President Trump during the 2024 election.
Analysts attribute Tesla's stock pressure to several factors:
* Weak overseas sales: Tesla's sales in China and Australia have declined significantly in recent months.
* Trump's trade policies: New tariffs on steel and aluminum, key raw materials for Tesla, are raising production costs.
* Geopolitical tensions: China's role in Tesla's supply chain poses risks amidst the ongoing trade war with the US.
* Disappointing Q4 2024: Tesla missed earnings estimates and reported a decline in automotive sales.
* Demand concerns: Analysts express concerns about potential EV fatigue and competition impacting Tesla's sales outlook.
Analysts have downgraded earnings estimates for Tesla in the wake of the company's lackluster fourth quarter. JPMorgan analyst Ryan Brinkman remains bearish, with an Underperform rating and a price target of $135, citing a high risk of mean reversion and cautioning against investing in Tesla shares.
Despite Musk's political connections, investors are increasingly focusing on Tesla's fundamentals. The stock's performance in the coming months will depend on the company's ability to address market concerns, execute its growth strategy, and navigate the evolving geopolitical and economic landscape.