Elon Musk may be President Trump’s first buddy, but Tesla (TSLA) investors have swung back to focusing more on the company’s fundamentals than the billionaire’s close proximity to the Resolute desk.
Their decision?
To send Tesla’s stock tumbling less than two months into 2025.
Shares of the electric vehicle maker led by Musk are down 28% to $349.18 since hitting a record high on Dec. 18, 2024, weeks after the Election Day win for Trump.
The stock is the worst-performing member of the closely watched «Magnificent Seven,» which includes Meta (META), Amazon (AMZN), Microsoft (MSFT), Nvidia (NVDA), Google (GOOG), and Apple (AAPL).
At the time, enthusiasm was running high that Musk’s fierce support of Trump would unlock big-time profits as driverless cars would get quicker approval — among other bullish lines of thinking.
But since reaching that peak, Tesla’s stock has fallen below its key 50-day moving average, according to Yahoo Finance data. The next test of investor sentiment on Tesla is coming at $334, or the 100-day moving average. Should the stock break below that important support level, it could have a clear shot to the 200-day moving average of $286.
Tesla’s 52-week low is $142.05 hit on April 22, 2024.
«Given the considerable run up in the shares as performance and expected future performance have by equal measure deteriorated, we sense a high risk of mean reversion (including by potential catalysts that may be difficult to foresee at present) and for this reason continue to recommend caution with regard to an investment in Tesla shares,» JPMorgan analyst Ryan Brinkman wrote in a new client note.
Brinkman is one of the most bearish sell-side analysts on Tesla, with an Underperform rating and $135 price target.
The reasons Tesla’s stock is under pressure are numerous.
For one, numbers on Tesla sales from important overseas markets have come in soft to kick off the year. The readings have triggered some concerns in Tesla circles that Musk’s close proximity to Trump is damaging its brand.
Tesla sold 63,238 vehicles in China in January, according to new data released this week from China Passenger Car Association (CPCA). The figure marked a steep 33% drop from December.
Australia’s Electric Vehicle Council (EVC) reported Tesla’s overall sales fell 33% year over year in January.
Meanwhile, fresh tariffs from President Trump stand to raise costs for Tesla and other EV makers.
On Monday, Trump signed two executive orders imposing new 25% tariffs on steel and aluminum. Both steel and aluminum are key raw materials used by Tesla.
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