It’s been quite a turbulent week for shares of Tesla (NASDAQ:TSLA), with the feud between Elon Musk and Donald Trump starting to spiral out of control. Indeed, things have gotten nasty in a hurry, with Trump threatening to terminate some government contracts with Musk’s companies.
As the Musk-Trump relationship deteriorates further, Tesla shareholders may worry that the Trump administration may not be as accommodating as the robotaxi rollout moves forward.
Given the massive regulatory haze clouding the firm’s future and the potential elimination of electric vehicle (EV) tax credits (and other incentives), it’s not hard to imagine why many TSLA shareholders are rushing to the exits in a panic. Despite the fear and recent slide in the name, there is one Wall Street bull who is not inclined to hit that panic button, as most others are right now.
Key Points
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Things took a nasty turn between Elon Musk and Donald Trump. Investors are hitting the panic button in response to Thursday’s back-and-forth.
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Wedbush Securities’ Dan Ives thinks Tesla is driving into a “golden age” of autonomy. But will the Trump-Musk feud change things?
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The stock’s still expensive and the magnitude of risks has surged after Thursday’s 15% pummelling in the stock.
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It’s getting harder to stay bullish on Tesla, but Dan Ives is focused on the long-term.
Though long-time Tesla bull Dan Ives, famed analyst over at Wedbush Securities, is still upbeat on the longer-term potential of Elon Musk’s EV empire, I can’t say I share his enthusiasm in light of the Musk-Trump feud, which could easily take a turn for the worse as the two sides continue to take aim.
At this juncture, it’s hard to envision the relationship being repaired after an exchange of words on social media. And while time will tell what the full implications will be for Tesla shares, I do think that the more than 14% decline in TSLA stock was warranted and perhaps a bit underdone, given the magnitude of the relief rally that preceded the plunge.
In any case, Ives previously stated his belief that Tesla stock could double in the next 12-18 months to command a $2 trillion market cap as the firm enters the “golden age” of autonomy and AI. It’s unclear if Ives is ready to backtrack on his bullishness as things get personal between the world’s richest man and the U.S. President. Time will tell. Either way, it’s hard to see the longer-term opportunity when a potential hurricane of pain may be immediately up ahead.
Personally, I’d be more inclined to wait and see, rather than start loading up the Cybertruck after a modest 15% spill.
The bear case for Tesla is growing stronger amid the Musk-Trump feud.
Tesla isn’t exactly a cheap stock at over 150 times forward price-to-earnings (P/E), and if Musk and his companies fall into Trump’s bad books, the magnitude of the pain, I believe, could have the potential to be significant as Trump turns from a Tesla fan to a potential critic.
Indeed, the elimination of EV tax credits under Trump’s proposed “Big Beautiful Bill” could already deliver quite the gut-punch to the EV maker.
And as the winds of recession move in (Musk warned that Trump’s tariffs will cause a U.S. recession in the second half of the year, while also calling for his impeachment), there’s really no telling just how much demand could erode.
Combined with the brand erosion suffered earlier in the year when Musk headed the Department of Government Efficiency (DOGE) and Tesla stock feels like way too difficult of a falling knife to reach for as it plunges below $280 per share.
How low could TSLA stock go?
There are several avenues through which Trump could inflict pain on Tesla, and more insults made by Musk, I think, won’t ease matters.
Whether it’s sector-wide tariffs, the elimination of subsidies, the placement of tougher regulatory hurdles ahead of Cybercab, or even the threat of company-specific tariffs, there are a number of initiatives that could send TSLA stock below the $200 mark.
In a prior piece, I highlighted the broad range of price targets held by Wall Street analysts. UBS analyst Joseph Spak has a $190 price target on the name, which entails close to 33% downside from current levels. I think such a level could be put to the test over the coming weeks and months.
Whether it’s buyable at such a level ultimately depends on what happens with the proposed bill, as well as the feud between Musk and Trump. Can the situation be defused in a friendly manner? Time will tell. Either way, investors will be left pondering what ever happened to that “great relationship.”
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The post This Wall Street Veteran Thinks Tesla Stock Can Double Over the Next 12-18 Months, But Another Pro Thinks It’ll Drop 33% appeared first on 24/7 Wall St..
