Tesla Bulls Face a Crucial Moment as Musk and DOGE Distract from Stock Performance

Tesla Inc (NASDAQ: TSLA) experienced a significant drop in stock value, plunging 15% in just one day. This downturn has raised concerns among investors, especially with declining sales and controversies surrounding CEO Elon Musk managing his commitments to various ventures, including the Department of Government Efficiency.

However, despite these unsettling indicators, well-known analyst Daniel Ives from Wedbush remains optimistic about Tesla's future. In a recent investor note, Ives described the current sell-off as one of the most painful days for Tesla bulls, a sentiment he shares as an investor himself. Nevertheless, he reiterated his Outperform rating on Tesla stock, maintaining a price target of $550, which he had set earlier this January.

According to Ives, the protests at Tesla dealerships and Musk's involvement in activities related to DOGE are mere distractions that do not alter the fundamental value of the company. He acknowledged that the start of 2025 has been particularly harsh for Tesla, but urged investors not to lose faith. He stated, "If every time we threw in the white towel on the Tesla name when it got hot in the kitchen, we would have missed one of the most transformational growth stories in modern history.”

However, this is undeniably a challenging time for Tesla bulls, with the ongoing distractions from Musk's public persona and issues related to the brand looming large over Tesla stock. Ives characterized this period as a "gut check moment" for investors. He hopes Musk will find a way to balance his commitments across Tesla, DOGE, and SpaceX as the year progresses, alleviating concerns regarding distractions.

Moreover, Ives highlighted that having Trump in the White House could work positively for Tesla by creating a regulatory environment favorable to the company's ambitions. He believes Tesla is at the beginning of a significant innovation phase, with a focus on introducing a new vehicle priced under $35,000 and advancements in full self-driving technology.

This new model has the potential to rekindle consumer interest in electric vehicles globally and help Tesla regain its growth momentum. Ives asserted, "The autonomous transition will be the biggest automotive industry transformation in modern history, with Tesla leading the way globally.” He predicts that autonomous technologies and advancements like Optimus could make up as much as 90% of Tesla's valuation, leading the company to achieve a market cap exceeding $2 trillion.

Canaccord Genuity: Meanwhile, analysts at Canaccord Genuity have also raised concerns regarding dwindling demand for Tesla vehicles across Europe and other regions. Analyst George Gianarikas is conducting a consumer survey to gauge current consumer sentiment and purchasing intentions. He noted a surge of data in 2025 indicating that Tesla's sales have begun to falter.

Despite these concerns, Gianarikas maintained a Buy rating on Tesla stock and set a price target of $404. Canaccord is reaching out to consumers with a survey asking if they are more or less inclined to purchase a Tesla compared to last year. The survey focuses on identifying the most significant factors influencing their potential purchase decisions, exploring whether they are delaying their purchases due to the anticipated release of the new Model Y.

Gianarikas expressed caution, suggesting that delays in purchases might not reflect a complete halt in Tesla's sales momentum, emphasizing the importance of understanding consumer motivations better.

The overall market reaction to Tesla stock has shown slight recoveries, with shares rising 2.3% recently, trading at $227.25. However, the stock is still down 40.1% year-to-date and has lost over 50% of its value compared to its all-time highs set in December. Investors are now watching closely for further developments as these two firms provide their insights into Tesla's future amidst its current challenges.

Tesla, Stock, Musk