Tesla stock recovers 5% on Tuesday: here's why

Wedbush Securities maintained its "outperform" rating on Tesla stock, with a price target of $550.

Wedbush expressed concern about CEO Elon Musk’s focus on the DOGE initiative and his alignment with the Trump administration since Trump’s second term began in January.

The firm noted that Musk’s absence from Tesla’s operations has contributed to negative sentiment, reflected in protests at Tesla dealerships and incidents of violence against Tesla drivers in both the United States and Europe.

The TSLA stock was up close to 5% on Tuesday. In the past one month, the stock has gone down around 30%.

Why is Wedbush still bullish on Tesla?

Despite these concerns, Wedbush emphasized that Tesla is at a “moment of truth” and warned that continued distractions could lead to further damage to the company’s brand.

However, the firm pointed out that only a small percentage of Tesla owners — less than 5% — have indicated they would reconsider their purchases due to Musk’s political actions.

Wedbush also highlighted Musk’s history of stepping up for Tesla’s shareholders during challenging periods and expressed optimism about the company’s innovation prospects over the medium and long term.

Donald Trump will buy a Tesla

Separately, President Donald Trump announced his intention to purchase a Tesla to show support for Musk.

Trump, posting on Truth Social, said he planned to buy a new Tesla as a gesture of confidence in Musk amid declining sales and a weakening share price.

Trump claimed “radical left lunatics” were “illegally and collusively” boycotting Tesla in response to Musk’s political alignment.

Trump’s claim drew attention as consumer boycotts are legal under US law, with the Supreme Court ruling in 1982 that the First Amendment protects Americans’ right to protest private businesses.

Tesla shares are down 40% in 2025.

Wall Street analysts on Tesla

Earlier in the week, UBS analysts lowered their price target on Tesla to $225 from $259 while maintaining a ‘sell’ rating.

The revision comes after UBS reduced its delivery forecast for the first quarter of 2025 to 367,000 vehicles, down from the earlier estimate of 437,000.

The analysts attributed this to a slower current run-rate but noted that deliveries could improve toward the quarter’s end, possibly due to increased promotional efforts.

Last week, Baird added Tesla as a Bearish Fresh Pick, citing production challenges and weakening demand as near-term concerns. The firm cut its price target on Tesla from $440 to $370.

Earlier in the month, Morgan Stanley reinstated Tesla as its “Top Pick” in the US auto sector, setting a price target of $430, suggesting over 47% upside from its current share price.

The firm views Tesla’s 30% year-to-date decline as a buying opportunity, citing the company’s shift beyond electric vehicles into artificial intelligence and robotics.

While acknowledging softer vehicle deliveries, Morgan Stanley believes Tesla is transitioning into a broader technology company focused on AI-driven automation.