This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:
Tesla stock (TSLA) has plummeted and rocketed back to life so many times that it’s easy to forgive the analysts and investors who have given up on the ticker at one time or another.
If Tesla was a meme stock before there were meme stocks, part of its appeal comes from its seemingly infinite comeback stories. Tesla’s DOGE-era doldrums are, for the faithful bulls, just another pivot point to the next run-up.
Chances are you’ve been wrong about Tesla — the company, the stock, the Musk stand-in — at least some of the time. Before questions about the negative impacts of US and European political interference, there was ceaseless discussion about Twitter and a distracted CEO. And before there were (other) red flags concerning Chinese competition, there were worries about “production hell” and “bottlenecks” after the company debuted the mass-market Model 3.
“There have been a number of times in the Tesla story over the past decade that negative sentiment and Street worries have overshadowed the narrative of this unique disruptive global tech story,” wrote Wedbush analyst Dan Ives, a stalwart Tesla bull. But if you embrace Musk’s vision that Tesla is not merely a car company, he continued, “This is the start of the biggest innovation and technology cycle in Tesla’s history ahead over the next few years.”
Analysts with a more critical take on Tesla’s business acknowledge the potential of Musk’s autonomous ambitions. But they see that upside already baked into the stock, which, they believe, is overvalued even when you consider the financial goodies flowing from humanoid robots and a fleet of robotaxis.
And while Tesla remakes itself as an AI and robotics company, it still has to sell cars. Which is proving to be a stubborn predicament, both in the US and Europe, where Musk’s unpopularity is hurting sales, and also in China, where Tesla and its CEO have a better image but stiff competition.
On Monday, UBS analyst Joseph Spak reiterated his 12-month Sell rating on Tesla shares and cut his price target from $259 to $225. He cited lower delivery forecasts stemming from softer demand for Model 3 and Model Y vehicles.
A bearish call coupled with downbeat figures from China, where Tesla shipments fell to the lowest level in almost three years, dragged shares 15% lower, erasing the rest of the post-election gains and putting the stock at -41% year to date.
The Trump bump has been wiped out. And the closing record of $479 on Dec. 17 has been cut in half.
But if the harsh pullback represents a transition from an automotive company to an AI, robotaxi, and robotics play, with many investors still unconvinced, the next run-up will be a very costly “told you so.”
Or, if it never arrives, another Tony Stark fantasy.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
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