Tesla’s Retail Investors Double Down Despite 34% Plunge—Betting on Bounce or Blind Faith?
Elon’s empire stumbles, but the little guys keep stacking shares. What do they know that Wall Street doesn’t—or is this just meme-stock muscle memory?
Retail traders vs. reality: Tesla’s 34% nosedive hasn’t shaken true believers. While institutional investors flee, Main Street’s buying the dip like it’s a Black Friday doorbuster.
The cynical take: Maybe they’re just conditioned by crypto winters and GameStop mania. After all, what’s another 34% when you’ve survived 80% crashes chasing ‘generational buying opportunities’?
Retail buyers double down as institutions pull back
Nick says he’s personally convinced 20 people—friends, neighbors, and coworkers—to buy a Model Y. He says it’s not about hype. He thinks half the cars on the road could eventually be Model Y vehicles. And while Elon is getting slammed from both parties in Washington, and his approval numbers are down, none of that seems to be shaking Nick or thousands of others holding the stock.
Even with falling delivery numbers, Tesla shares jumped 5% on Wednesday. That came just hours after the company’s disappointing sales report. And it wasn’t Wall Street driving that recovery. It was individual traders. On Interactive Brokers, Tesla was the most actively traded stock during the five days ending Monday. The platform logged 236,826 buy orders, massively outpacing the number of shares sold.
The buying frenzy didn’t stop there. Traders also poured into a fund that offers double the exposure to Tesla’s price moves, showing that retail traders are looking to juice their positions even more. They’re not cutting losses, they’re actually chasing them harder.
But Wall Street doesn’t share that optimism. Analysts are still warning that Tesla’s valuation is overinflated. Right now, the stock trades at 132 times its trailing 12-month earnings, way above its 10-year average of 125.7. By comparison, companies in the S&P 500 average just 22.2 times earnings. And many experts say that kind of multiple just isn’t sustainable.
Analysts lower targets while fans raise bets
Garrett Nelson, senior equity analyst at CFRA Research, released a note Wednesday with a valuation model that puts Tesla’s fair value at $258 per share, which is 18% below its current price. Garrett’s firm kept a “hold” rating and slapped a 12-month target of $320 on the stock.
Across 54 analysts tracked by FactSet, the average target is $311.12. So while retail investors think they’re buying early, analysts think they’re overpaying.
Still, this isn’t a normal stock story. Tesla has more retail support than any of the other top US tech companies, including Apple and Amazon. In FactSet’s breakdown of shareholder types, Tesla has the highest percentage of “other” investors, a category that excludes big institutions and insiders. It’s filled with individuals using trading apps, crypto bros on X, and people betting their future on TSLA.
Some say they’ve made serious profits riding the stock’s wild swings. Others are betting long-term, ignoring analyst targets and traditional metrics. The retail crowd has stuck around through every drop and spike, and they don’t seem scared of another one.
That belief extends beyond just stock ownership. Elon Musk has used the inflated share price to raise billions of dollars for his other ventures, many of which aren’t making money and probably won’t for a long time. But thanks to Tesla’s performance, he keeps getting more money. Love him or hate him, but Elon really is one of the greatest businessmen alive.
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