A high-profile feud between President Trump and billionaire Elon Musk continued to simmer on Friday after a Thursday crescendo saw more than $150 billion in value wiped from Tesla (TSLA) stock, prompting at least one investor to call Musk’s government foray a “disaster” and leaving the future of Musk’s government entanglements in question.
“This is a disaster of epic proportion for Tesla and SpaceX,” Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management CEO, told Yahoo Finance.
“And whether Elon wants to accept it or not, he did help Trump get elected. It is his fault that Trump is president of the United States.”
Thursday’s sell-off came after Musk slammed Trump’s GOP-backed spending bill, prompting fiery responses from the president and raising concerns over the political risk now tied to one of the world’s most valuable companies.
Tesla stock rose as much as 6% Friday as Musk and Trump moved to cool tensions.
Read more about Tesla’s stock moves and today’s market action.
Musk endorsed the then-Republican candidate soon after the assassination attempt on Trump in Butler, Pa.
Afterward, Musk frequently appeared at rallies, voicing his support for the Republican Party at large and pledging millions to America PAC, a Trump-aligned super-PAC. A flood of support for Trump from the tech community followed as Musk became one of Trump’s biggest public booster in the final days of the campaign.
After Trump was elected, the president appointed Musk as head of the newly formed Department of Government Efficiency, otherwise known as DOGE. The purpose of the agency was to eliminate government waste.
Musk officially exited the role late last month, claiming the agency had cut billions of dollars in costs.
Days later, Musk began openly criticizing Trump’s controversial tax legislation, which is estimated to add trillions to the national debt over the next decade.
The bill would also eliminate EV tax credits, a crucial government incentive for Tesla and a potential “death blow” to the company’s sales, according to Gerber. Having cleared the House, the bill now heads to the Senate, with Trump vowing to sign it into law by July 4.
“I’m sorry, but I just can’t stand it anymore,” Musk posted Tuesday on X. “This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it.”
The post opened the floodgates for a days-long escalation between the once-close confidants turned rivals. Trump wrote he was “very disappointed” in his former ally, while Musk fired back, saying the president wouldn’t have won the election if it weren’t for him.
‘This is now a showdown’
Investors reacted swiftly to the back-and-forth, sending Tesla shares down roughly 14% by Thursday’s close — the largest single-day drop for the stock in almost five years.
Gerber, whose firm holds about 235,000 Tesla shares, called the plunge “100% justified,” pointing out that much of Tesla’s stock value is driven more by perception than by the company’s fundamentals.
“I think we’re just getting started for the declines because a lot of the stock price’s value isn’t based off the underlying business,” Gerber said. “It’s based off the perception that Elon being a part of Tesla is somehow wonderful.”
Prior to Thursday’s sell-off, Tesla shares had rallied about 40% from their April lows, largely fueled by Musk’s close relationship with the president and his pledge to return his focus to Tesla after leaving his role with the Trump administration.
“As a shareholder, [this] couldn’t be worse for Elon and his properties and his investments and the future that he has because Trump’s got another three and a half years,” Gerber added. “Elon, in his ego and sort of weird haze of reality, actually thinks he’s more powerful than Trump. This is now a showdown.”
Still, other investors remain optimistic, particularly when it comes to Tesla’s upcoming robotaxi rollout and long-term plans for autonomous robots.
“I think people are going to be impressed,” said Craig Irwin, a senior research analyst at Roth MKM and Tesla shareholder. “The political noise and the other volatility is more short term in nature, at least as far as I see it.”
Irwin added, “The closeness between these two men is something that needed to change a little bit. These guys have so much in common: tremendous egos, tremendous power, and very strong opinions. … Their interests are still incredibly well aligned [and] I think cooler heads prevail.”
On Friday, Morgan Stanley analyst Adam Jonas reiterated his Overweight rating on Tesla and maintained a $410 price target, implying about 40% upside from current levels.
Jonas said his bullish stance reflects confidence in Tesla’s broader technological strengths spanning autonomous vehicles, robotics, and even space and communications infrastructure, which he believes present far greater long-term growth and margin potential than the company’s traditional EV business, currently under pressure.
“We believe the challenges facing Tesla’s current business are widely reported and well known, while the opportunities in the future business are potentially greatly underestimated,” Jonas said.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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