What has been a year of challenges continues for one of the largest EV manufacturers in the world. Indeed, Tesla (TSLA) stock is set to fall for the 5th consecutive day as CEO Elon Musk’s most recent bid to purchase ChatGPT developer OpenAI has worried investors.
The stock has certainly struggled to gain footing early this year, with analysts lowering expectations. According to one Oppenheimer analyst, the recent call to purchase the AI powerhouse was viewed as “a distraction from TSLA’s challenges” as worry persists.
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Entering the year, few companies had as high a potential ceiling as Tesla did. The stock price surged in the final months of 2024. Moreover, Elon Musk positioned himself as the incoming administration of newly elected US President Donald Trump. Yet, the company has not only failed to live up to those expectations; it has been one of the biggest losers of the year so far.
Tesla (TSLA) stock is starting down its fifth straight day of losses as CEO Elon Musk’s recent bid to purchase OpenAI has worried experts. Specifically, Musk offered to purchase the ChatGPT creation at a 38% discount to its capital raise in October of 2024. The bid isn’t expected to lead to much for either side. Yet, it tells Wall Street analysts a lot about the company’s position.
Oppenheimer analysts noted they see “increasing risks,” with Tesla as an EV and autonomous vehicle “competition intensifies,” according to an Investors Business Daily report. Moreover, they note that the company is “one of several autonomous technology providers, suggesting competition on price and performance.”
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Therefore, the company is unlikely to bring in capital by simply promising a Robotaxi product. Indeed, competitors like Uber and Waymo coming along with similar offerings. Meanwhile, his position at DOGE may be doing more harm than good.
Additionally, they state that Musk’s political affiliations can be worrying. Specifically, they note he “risks alienating consumers and employees as the Trump administration tests the limits of its power.” Meanwhile, Stifel analyst Stephen Gengaro dropped his Tesla price to $472.
Although they still hold a buy rating on the stock, they note a dropping sentiment. Specifically, Gengaro wrote, “Tesla’s net favorability rating [is] nearing all-time lows.” They expect that to affect near-term sales for the company. The stock has plummeted more than 17% in the last month.