Tesla Stock Crash: Is Now the Time to Buy or Brace for a Bigger Fall in 2025?
Tesla shares have slid over 11% from May highs. Is this a rare chance to buy, or are deeper losses looming? Here’s what investors need to know.
- 11%: Drop in Tesla’s stock since May 29, 2025
- 20%: Year-on-year decline in Tesla Q1 sales
- $299.38: Analyst average price target, 10% below latest close
- $275.73: InvestingPro Fair Value for TSLA — 17% under latest price
Tesla (NASDAQ: TSLA) investors are reeling after shares plunged another 5% in early trading, amplifying Wednesday’s 3.5% fall and extending a sharp reversal from late May. This dramatic 11% slide has market watchers split: Is this a golden entry point — or is a deeper correction ahead?
The past year for Tesla has been a rollercoaster, with CEO Elon Musk’s decisions often steering market sentiment. In May, Tesla soared 23% after Musk confirmed he would be stepping back from President Trump’s Government Efficiency group, focusing fully on Tesla instead. That promise spurred optimism, but sales data and valuation woes now cloud the outlook.
Why Did Tesla’s Stock Drop So Suddenly?
The selloff wasn’t just about broader market jitters. Tesla’s first-quarter sales fell 20% compared to last year, signaling tougher times ahead. Investors had bet big on Musk’s renewed focus, but with profits under pressure and competition from rival EV makers heating up, confidence has shaken.
Market analysts, reviewing the volatility, point to overvaluation. According to Investing.com, Tesla’s fair value should be closer to $275.73 per share — far below recent prices. Average Wall Street targets hover at $299.38, still lower than where Tesla closed last night.
Q: Will New Products Like Robotaxi Boost Tesla’s Fortunes?
Tesla’s big hope for 2025 rests on new, more affordable models and the ambitious Robotaxi network. The idea: let Tesla owners earn passive income by adding their current cars to a driverless rideshare fleet.
Industry insiders see the Robotaxi as a game-changer with viral potential — leveraging the millions of Teslas already on the road. If it gains traction, this service could provide a massive new revenue stream, setting Tesla apart from rivals such as Ford and GM.
But there’s a catch: much of the hype could already be “priced in” to the stock. That means any delays or disappointments could drive shares even lower in coming months.
How Do Analysts Rate Tesla Now?
Most analysts are taking a cautious stance. Despite Tesla’s visionary projects, Wall Street sees limited upside for the stock at today’s levels. Third-party valuation models and AI-powered strategies, like InvestingPro’s “Titans of Tech”, suggest other tech opportunities may offer stronger potential and less risk in the near term.
May’s “Titans of Tech” list delivered robust results — 11 of its picks jumped over 10% in a month, and three soared beyond 20%. As June unfolds, some new selections are already showing strength, according to InvestingPro.
How to Navigate Tesla’s Volatility in 2025
Here’s how everyday investors are responding to Tesla’s turbulence:
- Some are holding, betting on bounce-backs after major product launches or tech breakthroughs.
- Others are diversifying, using AI-powered stock-picking strategies to uncover lesser-known tech leaders.
- A cautious camp is waiting on the sidelines, watching for a clearer value or more dramatic drop below $275 before buying in.
Q: Should You Buy Tesla Now or Wait?
If you believe in Tesla’s next chapter — and trust Elon Musk to deliver on “full focus” — this dip could be tempting. But with Wall Street and valuation algorithms flashing warning signs, risk is high.
Other high-growth tech stocks, not yet in the mainstream spotlight, may offer better risk-reward this year. Resources like InvestingPro’s AI-powered picks can help identify those hidden gems.
Don’t Miss Your Next Big Move:
- Track Tesla’s next earnings call closely
- Watch for updates on Robotaxi and affordable EV launches
- Compare expert AI-powered stock picks alongside TSLA
- Consider diversifying with top-performing tech strategies
Make smart moves and stay ahead of the next twist in the Tesla tale. For more, visit trusted finance leaders like Bloomberg and Reuters for up-to-date analysis.
Stay informed — and invest wisely!