By Diana Paluteder
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鈥檚 recent bearish call, highlighting just how divided Wall Street has become on Tesla鈥檚 prospects.
The 鈥榡unior high school friendship gone bad鈥
Wedbush analyst Daniel Ives didn鈥檛 mince words about the situation unfolding between Musk and Trump, calling it a 鈥渟oap opera鈥 that has become a significant overhang on Tesla鈥檚 stock.
鈥淭his BFF situation has now turned into a soap opera that remains an overhang on Tesla鈥檚 stock, with investors fearing that the Trump Administration will be more hawkish and show scrutiny around Musk-related US government spending,鈥 Ives explained in his latest note.
The concern isn鈥檛 just about politics for the sake of politics. Tesla鈥檚 autonomous driving future depends heavily on favorable regulatory treatment. If Trump decides to make Musk鈥檚 life difficult, it could seriously impact Tesla鈥檚 timeline for rolling out these technologies at scale.
Ives expects the stock to face immediate pressure as investors worry about this 鈥渏unior high school friendship gone bad.鈥 But he鈥檚 betting the drama will eventually settle because, as he puts it, 鈥淢usk needs Trump and Trump needs Musk given the AI arms race going on between the US and China.鈥
Still, Ives acknowledged that Tesla investors are growing increasingly frustrated with Musk鈥檚 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鈥檚 puzzle, and JPMorgan鈥檚 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鈥檚 about as far from Wedbush鈥檚 $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.
鈥淏ased on our checks, the softer demand for Tesla vehicles evident in 1Q results appears to have continued into 2Q,鈥 Brinkman noted.
Featured image via Shutterstock.