Wedbush Securities just reaffirmed its bullish stance on Tesla (NASDAQ: TSLA) with an Outperform rating and $500 price target, even as the latest feud between CEO Elon Musk and President Donald Trump threatens to derail the regulatory progress Tesla needs for its autonomous driving ambitions.
The update comes as Tesla shares continue their recent slide. The stock dropped 1.84% to close at $317.66 on Monday, capping off a brutal week that saw shares fall over 10%. Pre-market trading brought more pain, with shares down another 4.24%.
This optimistic outlook from Wedbush stands in stark contrast to JPMorgan’s recent bearish call, highlighting just how divided Wall Street has become on Tesla’s prospects.
The ‘junior high school friendship gone bad’
Wedbush analyst Daniel Ives didn’t mince words about the situation unfolding between Musk and Trump, calling it a “soap opera” that has become a significant overhang on Tesla’s stock.
“This BFF situation has now turned into a soap opera that remains an overhang on Tesla’s stock, with investors fearing that the Trump Administration will be more hawkish and show scrutiny around Musk-related US government spending,” Ives explained in his latest note.
The concern isn’t just about politics for the sake of politics. Tesla’s autonomous driving future depends heavily on favorable regulatory treatment. If Trump decides to make Musk’s life difficult, it could seriously impact Tesla’s timeline for rolling out these technologies at scale.
Ives expects the stock to face immediate pressure as investors worry about this “junior high school friendship gone bad.” But he’s betting the drama will eventually settle because, as he puts it, “Musk needs Trump and Trump needs Musk given the AI arms race going on between the US and China.”
Still, Ives acknowledged that Tesla investors are growing increasingly frustrated with Musk’s political distractions. They want him focused on running Tesla, not engaging in Twitter battles with the President.
JPMorgan sees a 63% crash ahead
The political drama is just one piece of Tesla’s puzzle, and JPMorgan’s Ryan Brinkman is focused on what he sees as more fundamental problems with the business.
JPMorgan recently predicted a 63% crash for Tesla stock, setting a $115 price target that’s about as far from Wedbush’s $500 target as you can get.
JPMorgan analyst Ryan Brinkman lowered his Q2 delivery estimate to 360,000 vehicles from 395,000 down to 360,000 vehicles. That revised forecast represents a 19% year-over-year decline from the 444,000 deliveries Tesla reported in Q2 2024.
“Based on our checks, the softer demand for Tesla vehicles evident in 1Q results appears to have continued into 2Q,” Brinkman noted.
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