Why These Analysts Are Still Bullish on Tesla Despite Musk-Trump Spat

Key Takeaways

• Tesla CEO Elon Musk and President Donald Trump's public spat rattled Tesla shares this week, but several Wall Street analysts said they're still bullish on the stock.
• Analysts from Wedbush and Morgan Stanley said their long-term views on Tesla's potential were not substantially changed by the dispute.
• However, Wedbush said the fallout could make Tesla's regulatory path more challenging.

Tesla (TSLA) CEO Elon Musk and President Donald Trump's public feud rattled Tesla shares this week, but several Wall Street analysts said they're still bullish on the stock.

Wedbush analysts led by Dan Ives, with a $500 price target leading Wall Street analysts tracked by Visible Alpha, called the back-and-forth "jaw dropping and a shock to the market," but said the "feud does not change our bullish view of Tesla and the autonomous view."

However, they said it could "put a fly in the ointment" regarding earlier expectations that Musk and Trump's relationship could ease the regulatory path for Tesla to get approvals for its self-driving software and other products.

Tesla remains a stock that has divided analysts, with 10 of those tracked by Visible Alpha issuing "buy" ratings, while four have "hold," and four have "sell" ratings. Their price targets range from as low as $120, implying a nearly 60% drop from Friday's close, to Wedbush's $500 at the higher end. The stock added about 4% to close at $295.58 Friday, after tumbling 14% Thursday.

Morgan Stanley Says Trump-Musk Drama Could 'Alienate Multiple Sides of the Political Spectrum'

Morgan Stanley analysts, with a $410 price target, said the deteriorating relationship between Musk and Trump could further dent Tesla's sales as it "could potentially (temporarily) alienate multiple sides of the political spectrum." Still, they added they're "not convinced the longer-term vectors that drive the stock's value have changed here," pointing to Tesla's leadership in robotics, autonomous driving, and artificial intelligence technology.

Oppenheimer analysts were more cautious, saying the "difficult work at TSLA is just beginning as the company starts to repair brand damage while executing on its Physical AI strategy." Ahead of the EV maker's expected launch of its robotaxi service next week, the analysts said they "continue to see challenges in TSLA's autonomy platform," as issues could arise with its cameras or software.

Tesla shares were among the biggest gainers on the S&P 500 on Friday, winning back some of Thursday's losses. They've lost roughly one-quarter of their value since the start of the year, with Thursday's drop knocking Tesla out of the $1 trillion market cap club.

This article has been updated since it was first published to reflect more recent share price values.

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