Electric vehicle (EV) manufacturer Tesla (NASDAQ: TSLA) is on track to possibly outperform the broader market in 2025, supported by compelling technical indicators.
The market had anticipated Tesla to build on the late 2024 rally, which saw the equity eye the $500 level. Currently, Tesla is striving to maintain its price above the $400 support mark, which could act as a launchpad for the rally.
At the time of reporting, TSLA stock traded at $405.63, up 0.5% since the last market close.
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The projection of Tesla outperforming the general market was shared by stock trading expert Mike Investing, who observed that TSLA experienced a prolonged consolidation period during late 2024, marked by sideways price action, followed by a strong breakout in December, according to a post on X on January 12.
The bullish move is further validated by the downward channel in which Tesla has been trading since its recent high. The analyst suggested that Tesla is approaching the breakout zone, with the equity forming a bullish reversal pattern.
“TSLA will outperform every stock in the U.S stock market this year. With the massive consolidation period TSLA had followed by a breakout is simply just the beginning,” the expert said.
Once this breakout occurs, Mike Investing projects that the trajectory toward the $800 level could accelerate.
The expert further emphasized that “major catalysts” are on the horizon, with institutional investors already positioning for the expected rally. Whale activity, indicated by a heavy call option targeting $800, reinforces this bullish outlook.
Tesla stock key fundamentals
Interestingly, the $800 target has also been shared by banking giant Morgan Stanley (NYSE: MS). As reported by Finbold, the firm’s Adam Jonas identified Tesla as the bank’s “Top Pick” for 2025, foreseeing the equity reaching $800 in a bull case.
He revised the TSLA stock price target to $430 from $400 for the short term, maintaining an ‘Overweight’ rating. This bullish stance was based on what Jonas termed as the potential positive impact of Tesla’s autonomous vehicle technology and embedded artificial intelligence (AI).
Additionally, Tesla’s growth prospects in 2025 could gain momentum when Donald Trump assumes office, given his close ties with CEO Elon Musk. With Trump, there is anticipation that simplified regulations for autonomous vehicles could accelerate Tesla’s robotaxi ambitions.
Although Trump’s team has hinted at ending EV subsidies, which might initially seem detrimental, the move could ultimately strengthen Tesla’s market position as the company outshines competitors. Tesla bull Dan Ives from Wedbush Securities has backed this outlook.
It is worth noting that these benefits hinge on policy specifics, market reactions, and Tesla’s adaptability to a potentially less supportive regulatory environment.
Tesla stock’s 2025 headwinds
Not everything looks rosy for Tesla in 2024, especially as the company seeks to advance its self-driving technology.
Although the technology is touted as Tesla’s key revenue driver for the future, the Texas-based giant faces hurdles from the regulatory front. In this case, the National Highway Traffic Safety Administration (NHTSA) has initiated an investigation into Tesla vehicles with the “Smart Summon” feature, which allows drivers to move vehicles remotely via a smartphone.
At the same time, UBS analyst Joseph Spak cautioned that although Tesla has potential in AI and autonomous driving, its current valuation heavily depends on speculation, given the lack of tangible products in this space.
Finally, how Tesla deals with competition from the Chinese market will play a critical role in its performance, especially after Q4 deliveries fell short of consensus analyst estimates.
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