Tesla stock (TSLA) is trending down more than 7% in pre-market trading at the time of writing. Wedbush’s top analyst, Daniel Ives, expects Tesla shares to be “under some pressure” as investors worry about CEO Elon Musk‘s re-entry into politics. On Saturday, Musk announced the creation of a new political party, called the “America Party,” aiming to give Americans back their “freedom.” The move comes amid Musk’s ongoing feud with U.S. President Donald Trump over the “Big Beautiful Bill.”
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Despite the short-term noise, Ives remains highly optimistic about Tesla’s long-term stock outlook. The long-time Tesla bull maintained his Buy rating and a Street-High price target of $500 on TSLA stock, implying 58.6% upside potential from current levels. Ives ranks #1,027 out of the 9,710 analysts on TipRanks. He has a 52% success rate and an average return per rating of 7.80%.
Tesla Investors Are Experiencing ‘Exhaustion’
Ives noted that Tesla investors simply want the CEO to focus on manufacturing electric vehicles (EVs). He added that many of Tesla’s investors are feeling a “sense of exhaustion” from Musk’s continued engagement in politics. In May, Tesla shares moved higher after Musk announced his departure from the Department of Government Efficiency (DOGE) committee and vowed to spend more time on improving Tesla’s business performance.
Investors felt a temporary sigh of relief after Musk’s exit from politics and his renewed focus on business operations. However, things have now taken a “turn for the worst with this latest announcement,” Ives added. Tesla is facing one of its most crucial periods, with the launch of Tesla robotaxis and the Full Self-Driving (FSD) technology. The creation of a new political party will surely divert Musk’s attention away from the company. Ives stated that Musk’s deep dive into politics is “exactly the opposite direction” of what investors want from the CEO.
Trump has already taken note of Musk’s political moves, stating that the billionaire has gone “completely off the rails.” Responding to news of Musk’s new party creation, Trump said in a social media post, “He even wants to start a Third Political Party, despite the fact that they have never succeeded in the United States.” Ives believes that Tesla will face greater trouble in the future if the president and the Republican party begin to view Musk more as a competitor than as an ally.
Is Tesla a Buy, Hold, or Sell?
On TipRanks, TSLA stock has a Hold consensus rating based on 14 Buys, 12 Holds, and nine Sell ratings. Also, the average Tesla price target of $293.09 implies 7.1% downside potential from current levels. Year-to-date, TSLA stock has lost 21.9%.
