Tesla’s 45% stock drop sparks panic, yet Wall Street bulls see opportunity in market shake-up

Tesla stock has taken a beating, declining almost 11% this week and the stock has fallen from its post-election high to 45%, as per a report.

As the shares of the electric car giant continue to plummet, investors are getting worried. But not everyone is willing to write off Tesla. Wall Street bulls like Wedbush analyst Dan Ives issued a client note defending Tesla stock and also doubled down on his bullish views during what he calls a "gut check moment for the Tesla bulls (including ourselves)," reported Yahoo Finance News. Here's a closer look at what he says.

A big drop for Tesla

Tesla stock reached an all-time high of more than $479 a share on December 17. But fast forward to the current time, the stocks have declined almost 45%, closing Friday's session at approximately $263, its lowest close since the beginning of November, as per the report. The drop is due to a larger sentiment change on Wall Street as CEO Elon Musk's close ties with the Trump administration and leadership at DOGE have impacted the company, as per Yahoo Finance News.

Dan Ives stands firm on Tesla’s potential

Even with the drop, analyst Ives placed Tesla on Wedbush's "Best Ideas List" and reaffirmed his "Outperform rating", with a $550 share price target, reported Yahoo Finance News.

He stated that there are many instances in the Tesla story over the past decade when negative sentiments and Street worries have overshadowed the narrative of the global tech story, reported Yahoo Finance.

The analyst highlighted, "From the white knuckle production moments in 2017/2018 to financing worries to the Musk/Twitter soap opera in 2022 ... and now here again Tesla bulls find themselves with their back against the wall facing global negative sentiment around Musk/DOGE and the Trump Administration," as quoted in the report.

Ives' optimism

According to Ives, Tesla's CEO will better balance his time between DOGE and his company through this year. He claimed, "We continue to believe the best thing that ever happened to Musk and Tesla was Trump in the White House as this will create a deregulatory environment with a federal autonomous roadmap central to the Tesla golden strategic vision," as quoted by Yahoo Finance.

As per the report, Ives has set the highest price target for Tesla among the 48 Wall Street analysts tracked by Yahoo Finance, with his target at $550 per share. In contrast, the average price target from analysts across Wall Street stands at $346 per share for the next 12 months, reported Yahoo Finance News.

FAQs

What caused Tesla's stock to hit such a low?
Tesla’s stock has been in freefall since reaching a record of $479 in December. The drop has been caused by shifting market sentiments, particularly due to Musk's political ties and leadership at DOGE.

What is Ives' price target for Tesla?
Ives has set a price target of $550 per share for Tesla, reported Yahoo Finance.