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On Monday, Baird analysts downgraded Tesla (NASDAQ:TSLA) stock from Outperform to Neutral, adjusting the price target to $320 from a previous figure. The decision comes after Tesla’s stock surged 24% following what was described as a fundamentally poor quarter, with the S&P 500 rising 13% in comparison.
The analysts attributed part of the recent stock performance to anticipation surrounding Tesla’s upcoming launch of a more affordable vehicle and a robotaxi service expected in June. However, they expressed skepticism about Elon Musk’s optimistic comments on the robotaxi ramp rate, suggesting that these expectations might already be reflected in the current share price. With a beta of 2.46, Tesla’s stock typically exhibits higher volatility than the broader market.
In their analysis, the Baird team also pointed out that Musk’s association with former President Donald Trump has introduced considerable uncertainty to Tesla’s prospects. This relationship has been factored into their decision to downgrade the stock rating.
Despite the downgrade, Baird analysts still consider Tesla a core long-term holding. However, they have chosen to adopt a more cautious approach in the short term, stepping back from their previous stance.
Tesla’s stock, listed on NASDAQ under the ticker TSLA, will be closely watched by investors as the company approaches its anticipated June announcements. The company maintains strong financial health with a current ratio of 2.0, indicating solid liquidity to meet short-term obligations.
In other recent news, Tesla Inc. has experienced a leadership change within its Optimus humanoid robot program. Milan Kovac, previously the head of engineering for Optimus, has left the company, and Ashok Elluswamy, who leads Tesla’s autopilot teams, will take over the role. Meanwhile, Tesla is set to unveil its robotaxi service in Austin, initially operating ten driverless Model Ys as part of a small-scale pilot. Deepwater Asset Management’s Gene Munster commented on potential impacts from a conflict between Tesla CEO Elon Musk and President Donald Trump, suggesting it may pressure Tesla’s shares in the short term but not affect the long-term potential of the robotaxi service.
Additionally, TD Cowen analysts have maintained their Buy rating on Tesla stock with a $330 price target. They have highlighted the importance of Tesla’s execution on upcoming deliverables amid political uncertainties. In another development, Cathie Wood’s ARK Venture Fund has invested in Elon Musk’s Neuralink Corp. during its Series E funding round. This investment is accessible to U.S. self-directed investors through platforms like SoFi (NASDAQ:SOFI) and Titan. Lastly, President Trump is reportedly considering selling or donating a red Tesla he acquired earlier this year, according to a Wall Street Journal report.
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