Is TSLA Stock a Buy, Sell, or Hold as Donald Trump Buys a Tesla?

CEO Elon Musk’s deepening involvement in politics was once seen as a potential advantage for Tesla (TSLA), but the tide has turned against the electric vehicle (EV) king. Tesla’s stock has taken a 38% beating so far in 2025, weighed down by sluggish international sales, intensifying competition, and a wave of public outrage over Musk’s high-profile role in President Donald Trump’s newly established Department of Government Efficiency (DOGE). 

Earlier this month, protests erupted outside Tesla stores across the U.S., amplifying concerns that Musk’s political entanglements are doing more harm than good. However, Trump threw his full support behind Musk, vowing to buy a Tesla to stand against the backlash. On March 11, Trump bought a red Tesla Model S, handpicking it from a lineup outside the White House. 

Calling Musk a “great patriot,” he denounced the boycott attempts against the EV maker and said that Tesla was being unfairly targeted. 

While the president’s support might have lifted investor confidence, can Trump’s purchase reverse Tesla’s downward trajectory?

About Tesla Stock      

Tesla (TSLA) isn’t just an EV powerhouse anymore. It’s a force reshaping multiple industries. Beyond EVs, the Texas-based giant is charging ahead in energy storage, automation, and robotics. Valued at a market cap of approximately $804 billion, shares of the EV maker rode a wave of investor optimism last year, surging roughly 53% over the past 52 weeks and hitting a peak in December as hopes for a regulatory tailwind under Trump fueled bullish sentiment. 

But the momentum came to a screeching halt in 2025. The stock has nosedived nearly 40% in the year to date, battered down by Musk’s deepening political ties with Trump, which has taken a toll on Tesla’s brand image. Mounting EV competition and a sharp decline in international sales have only added to the turmoil. With shares down nearly 40% so far this year, Tesla now finds itself at the bottom of the elite “Magnificent Seven,” making it the group’s worst performer this year.

On the brighter side, while TSLA still commands a premium valuation, given its EV king status, it now trades below its historical levels. At 94.3 times forward earnings and 7.92 times sales, the stock is priced well under its own five-year averages of 116.39x and 11.91x, respectively. Known for its sky-high multiples, Tesla’s underwhelming price action this year has brought its valuation back to more tempered levels, leaving investors to weigh whether this marks a bargain entry point or a long-term shift in market perception.

Tesla Falls Short of Q4 Earnings Forecasts

The EV maker reported its fiscal 2024 fourth-quarter earnings on Jan. 29, but the results appeared less than impressive. Revenue ticked up just 2% year-over-year to $25.7 billion, missing analysts’ $27.1 billion target. Meanwhile, adjusted EPS came in at $0.73, up 3% from the prior year but still 4.8% below Wall Street’s forecast. Moreover, the company’s latest earnings showcased impressive growth in its emerging segments but exposed cracks in its core automotive business. 

Energy generation and storage revenue skyrocketed 113% year-over-year, while services revenue climbed a solid 31%, signaling strength beyond EVs. However, the heart of Tesla’s business, the automotive segment, took a hit, with revenue dropping 8% to $19.8 billion from $21.6 billion a year ago. 

Tesla attributed this drop in automotive revenue to lower average selling prices across its Model 3, Model Y, Model S, and Model X lineup. While these price cuts are designed to boost sales volume, they certainly come at a cost, chipping away at revenue and raising concerns about profitability.

The company didn’t shy away from making bold claims in its Q4 shareholder deck, touting 2025 as a “seminal year” in the company’s history. A major focus is the advancement of Full Self-Driving (FSD), with Tesla setting its sights on surpassing human safety levels and introducing an unsupervised FSD option for customers. 

The company is also ramping up its autonomous ambitions with its highly anticipated robotaxi services set to launch in select U.S. regions later this year. Plus, Tesla is accelerating its FSD (Supervised) expansion, with plans to bring its cutting-edge autonomous tech to Europe and China in 2025.

What Do Analysts Expect for Tesla Stock?

While investors cheered on Trump’s purchase of a Tesla, Wall Street remains split on the company’s future. On March 12, JPMorgan’s Ryan Brinkman slashed TSLA’s price target to $120 from $135 and maintained an “Underweight” rating, warning that backlash over Musk’s ties to Trump is eroding brand sentiment. He pointed to growing protests, boycotts, and a weakening resale market, slashing his Q1 delivery estimate to 355,000, well below consensus. 

Likewise, Guggenheim also cut its target to $170 and reaffirmed a “Sell” rating, citing softening demand and margin pressures.

On the other hand, Wedbush’s Dan Ives remains a staunch Tesla bull, holding firm on his $550 price target and an “Outperform” rating. The analyst sees the company leading the autonomous vehicle revolution, calling it the biggest shift in auto history. Thus, despite the prevailing short-term pains, he believes Trump’s presidency could be a game-changer, paving the way for deregulation and a federal autonomous roadmap central to Tesla’s future. 

Overall, Wall Street still remains skeptical of TSLA stock, keeping a consensus “Hold” rating. Of the 40 analysts offering recommendations, 14 back it with “Strong Buy,” three give a “Moderate Buy,” 13 advocates a “Hold,” and the remaining 10 maintain “Strong Sell.” The average analyst price target of $346.36 indicates nearly 40% potential upside from the current price levels, while Wedbush’s Street-high price target of $550 suggests that TSLA could rally as much as 120% from here.