The Rollercoaster Ride of Tesla Stock: Analyzing the Ups and Downs
As the month of February comes to a close, Tesla (NASDAQ: TSLA) shareholders may be feeling a sense of relief. The stock experienced its second-worst performance in history, with a staggering 29.5% decline in 2025. For those who have been holding onto TSLA stock, it has been a challenging period to weather.
However, for the optimists among us, there is a silver lining. Despite the recent downturn, TSLA stock is still up 40% over the past 12 months. Furthermore, it is currently trading 19% below the consensus price target set by Tesla analysts on MarketBeat. This presents an opportunity for investors who believe in the long-term potential of the company.
Analysts, on the other hand, have started to adjust their price targets in response to the changing market conditions. Bank of America, for instance, recently lowered its price target for Tesla from $490 to $380. While this new target still represents a 16% premium over the consensus price, it indicates a more cautious approach from institutional investors. This shift suggests that now might not be the ideal time to jump into the stock, and waiting for a clearer entry point could be prudent.
### A Reality Check on the Trump Trade
Tesla stock was initially seen as a major beneficiary of the “Trump trade” following the 2024 election. The close association between Elon Musk and President Donald Trump was expected to bode well for the company. However, this narrative has taken a different turn, with Musk’s increasing political involvement raising concerns among shareholders.
In addition to his role in the Department of Government Efficiency (DOGE) committee, Musk’s various business interests and political engagements have sparked unease among investors. The looming impact of tariffs on Tesla sales, particularly in China, adds another layer of uncertainty. Recent data from Europe showing a decline in Tesla registrations by 45% YoY while overall EV registrations are on the rise further underscores the challenges facing the company.
### Not Everyone is Bearish on Tesla
Despite the headwinds facing Tesla, there are still optimistic voices in the market. Morgan Stanley, for example, has maintained its price target of $430 for TSLA stock. Analyst Adam Jonas remains bullish on the company, citing its diversified offerings beyond just electric vehicles. The belief in Tesla’s advancements in energy storage, AI, and robotics is a key factor driving the positive outlook.
It’s worth noting that BYD, a leading competitor in the EV space, sees potential for collaboration rather than cutthroat competition. The general manager of branding and public relations at BYD emphasized the need for industry players to work together to grow the new energy vehicle market. This cooperative approach could benefit both Tesla and BYD in the long run.
### Investors Have Seen This Price Movement Before
Despite the recent decline in TSLA stock, it still commands a high forward earnings multiple of around 111x. This valuation may raise concerns about overvaluation, especially when compared to historical averages. However, Tesla shareholders have weathered significant drops in the past, such as the 72% decline from November 2021 to January 2023.
Currently, TSLA stock is hovering around its 200-day simple moving average, a critical level for technical traders. A bounce from this level could signal a relief rally, while a break below could lead to further downside towards $214, representing a 32% drop from the current price.
In conclusion, the volatility in Tesla stock reflects broader market uncertainties and evolving investor sentiment. Understanding the underlying factors impacting Tesla’s performance can help investors make informed decisions about their portfolios. Whether you’re a seasoned investor or new to the world of finance, staying informed and being mindful of market dynamics is key to navigating the ever-changing landscape of investing.