Tesla Stock Takes Another Credibility Hit—Investor Confidence Wavers

Tesla's credibility takes another blow as investors voice growing concerns over the stock's stability. Market watchers point to recent volatility and shifting sentiment as key factors undermining confidence.

Behind the Numbers

While specific figures weren't disclosed in the original context, the trend highlights ongoing challenges for the electric vehicle giant. Traditional finance skeptics might chuckle—another day, another blue-chip stock facing the music while crypto portfolios quietly outperform.

The fallout continues as Tesla navigates both market pressures and investor expectations. No company is immune to scrutiny, especially when credibility comes into question.

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Many have elected to take this bet throughout the years, which explains why TSLA’s share price trades at multiples far-and-above those of a standard car company. A central pillar in the current investment thesis is the trillion-dollar robotaxi opportunity and Tesla’s attempts to serve as a central cog in a driverless future.

After years of promises by Musk, the company launched limited commercial service in Austin, Texas earlier this summer. While currently a safety driver is present in the vehicles, Musk announced yesterday that these WOULD be removed by the end of the year.

The technological wherewithal to make self-driving cars is no small feat of engineering, and Tesla had built a supercomputer called Dojo to train its models and improve its Full Self-Driving technology. However, last month, the news broke that the company was terminating the computer, with Musk acknowledging that it had reached “an evolutionary dead end.”

The investor known by the pseudonym Simple Investment Ideas wasn’t thrilled by this development.

“The recent shuttering of Dojo represents the most concrete sign that the company’s robotaxi vision is faltering,” asserts the 5-star investor.

Simple Investment reminds investors that Tesla had previously defined Dojo as a “necessary ingredient” for autonomous driving, as it was geared to process enormous amounts of data at scale. The move now forces Tesla to use third parties for these services, making it no different than other companies in their reliance on Nvidia and AMD.

But beyond the operational and technical setback, the investor also believes that development further chips away at Tesla’s credibility.

“Without Robotaxis, Tesla is just a carmaker with an aging lineup, deteriorating margins, growing competition, and an increasingly erratic CEO,” adds Simple Investment Ideas.

Needless to say, that would have plenty of deleterious effects on Tesla’s valuation. That’s led the investor to decide that the time is right to head out the door.

“Without a mass market robotaxi service, Tesla looks like what bears have long argued it to be: a capital-intensive carmaker masquerading as a software giant,” concludes Simple Investment Ideas, who rates TSLA a Sell. (To watch Simple Investment Ideas’ track record, click here)

Wall Street presents a mixed picture, with analysts split between 14 Buys, 14 Holds, and 8 Sells – making TSLA a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $309.00 has a downside in the high single-digits. (See)

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