The electric vehicle behemoth, Tesla Inc (NASDAQ: TSLA), is currently navigating a particularly volatile phase, with its share price experiencing a precipitous drop below the pivotal $200 threshold to a concerning $197.35.
This notable decline, eroding nearly one-fifth of the company’s market valuation in a matter of weeks, reflects burgeoning investor anxiety over the sustainability of EV demand—a cornerstone of Tesla’s unprecedented growth narrative.
The immediate imperative, as delineated by prominent macroeconomist Jesse on X, is for Tesla’s stock to re-establish its position above the $200 mark to avert the risk of a further descent towards a less fortified $150 support level, where a confluence of factors including a daily gap and peak volumes await to test the stock’s resilience.
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With the market sentiment teetering on the edge of bearishness, investors are grappling with the question: What lies ahead for Tesla’s stock in the future?
Short-term headwinds and technical analysis
The bearish sentiment is further substantiated by the technical analysis (TA), with Tesla displaying only 11 green days out of the last 30 and trading near the lower end of its recent price range.
The Fear & Greed Index signals ‘Fear,’ reflecting investor apprehension. Technical indicators suggest caution, advising against the initiation of new long positions at this juncture. There’s a narrow support zone at the current trading level, but with no significant support underneath until significantly lower levels.
Machine learning predictions
Adding to the complexity of the situation are the projections by machine learning algorithms from CoinCodex. These AI-driven forecasts anticipate a stark decline in Tesla’s share price to $93 by November 3, 2024, over 53% drop from the current levels.
However, these algorithms offer a surprising reversal of fortunes with a projection of Tesla’s stock rebounding to $422.39 by 2025, marking an increase of over 113% from today’s price.
The critical variable in this forecast is Tesla’s ability to ramp up delivery figures for new and upcoming vehicles such as the Cybertruck, which may have a significant impact on the company’s financial performance and thus, its stock valuation.
Looking Towards 2025
As we extend our gaze to 2025, it is essential to contextualize Tesla’s potential price trajectory within the broader EV industry’s growth, regulatory tailwinds, and Tesla’s own innovation pipeline.
While the short-term predictions hint at volatility, Tesla’s long-term value proposition remains robust, underscored by its cutting-edge battery technology, software updates, and autonomous driving capabilities. These technological advantages could drive its recovery and help achieve the price targets set forth by AI predictions for 2025.
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