Tesla Stock Under Microscope as Trump-Musk Feud Roils Markets

Wall Street's favorite circus act is back—Elon Musk and Donald Trump's latest spat sends analysts scrambling to reassess Tesla's valuation. Because nothing says 'stable investment' like a tech CEO doubling as a political lightning rod.

While the EV giant's fundamentals haven't changed, the spectacle proves once again that in modern finance, drama often outweighs data. Stay tuned for the next episode of 'Billionaires Behaving Badly.'

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The following day, the stock ROSE 3.7% as the feud ended and rumors about a possible truce began circulating. Even so, the uncertainty about lasting peace persists, and analysts fear that the damage has already been done. Year-to-date, TSLA stock has lost 26.9%.

Analysts’ Views on the Trump-Musk Fallout’s Impact

Analysts were quick to assess the impacts of the fallout and have given varied perspectives on Tesla’s future trajectory. Let’s briefly understand their insights.

Barclays analyst Dan Levy observed that Tesla’s stock sell-off on Thursday may have pre-empted a “sell the news” reaction before the company’s much-awaited robotaxi launch on June 12. Having said that, Levy believes that TSLA stock may not have fully priced in the short-term negative fundamentals. He highlighted that Tesla’s autonomous taxi narrative “remains front and center,” with a potentially large TAM (total addressable market) opportunity.

Levy is impressed by Tesla’s progress on the robotaxi venture so far. However, he noted that the company needs to manage expectations before scaling operations, since Tesla’s stock price has already priced in much of the robotaxi’s potential success. Levy has a “Hold” rating on TSLA stock with a $275 price target, which implies 6.8% downside potential from current levels.

On the other hand, Oppenheimer analyst Colin Rusch believes that the “political calculus” surrounding renewables energy and electric vehicle (EV) support has shifted following the Musk-Trump feud. The fight could lead to unfavorable provisions for the EV sector and Tesla’s autonomous vehicle initiatives. Meanwhile, Tesla is trying to repair brand damage and maintain focus on its physical AI strategy. The five-star analyst has a “Hold” rating on TSLA stock.

However, Rusch believes that the upcoming Senate Budget Bill may include more favorable language for solar companies, which could benefit Musk’s solar panel business. Tesla’s reliance on photon-counting cameras for its autonomous driving technology could see continued challenges. Rusch warned that investors will be “less forgiving” of any future product and launch delays, given Musk’s altered political standing.

Meanwhile, Morgan Stanley analyst Adam Jonas noted that Tesla “still holds so many valuable cards that are largely apolitical.” He believes that Tesla’s long-term drivers such as AI leadership, robotics, manufacturing and supply chain re-architecture, renewable power, and critical infrastructure remain unchanged. Additionally, Jonas argues that the phasing out of EV tax credits from the “Big Beautiful Bill” will not have a material impact on Tesla. The top analyst reiterated his Buy rating on Tesla stock with a price target of $410, implying 38.9% upside potential from current levels.

Is Tesla a High-Risk Stock?

Considering Tesla’s declining EV sales across the globe and the recent fallout with Trump, analysts have become cautious on its long-term stock trajectory. On TipRanks, TSLA stock has a Hold consensus rating based on 16 Buys, 10 Holds, and 10 Sell ratings. The average Tesla price target of $285.91 implies 3.1% downside potential from current levels.