Tesla Stock: Sharp Downward Spiral Amid Trump's Tariff Policy

Tesla's stock has plummeted dramatically in recent trading sessions, falling below $209 after hitting highs of over $480 following the US elections. This represents a staggering 50% drop from its yearly peak. The decline intensified with the stock falling for four consecutive days, including a sharp 9.9% drop last Friday, followed by further losses of 1.2% on Monday and 2.7% on Tuesday. This downward trajectory coincides with the announcement of sweeping tariff increases by the current administration, which Tesla's leadership has acknowledged will have "significant" impacts on the company's operations. Despite their well-known alliance, the company's chief executive publicly criticized the administration's tariff architect, calling him "an idiot" and "dumber than a sack of bricks" over the proposed 104% tariff on Chinese imports.

Analysts Divided on Future Prospects

Despite the concerning market performance, some analysts view the current situation as a potential buying opportunity. Investment bank Benchmark has added Tesla to its "Best Ideas" list, suggesting the recent selloff might be overblown, though they reduced their price target from $475 to $350. Key upcoming catalysts include the anticipated unveiling of a new vehicle model in the second quarter and the planned introduction of robotaxi services in Austin. However, other financial experts remain skeptical, with JPMorgan maintaining an "Underweight" rating and lowering their price target to $120, citing "unprecedented reputational damage." The company's fundamental challenges include disappointing delivery numbers, which fell 13% year-over-year to 336,681 in the first quarter, with Chinese sales dropping 20% as local competitors gain ground with more affordable offerings.

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Source StockWorld