Tesla Stock Plunged 34% in Q1. Should You Buy the Dip or Stay Away From Shares Here?
Tesla (TSLA) has had an unusually bad start to the new year. Its shares tanked an alarming 34% in the first quarter of 2025, marking their worst quarterly performance in about three years.
Tesla's reputation is being dragged through the mud as its billionaire chief executive, Elon Musk, continues to be involved in politics. Recent acts of vandalism and arson against TSLA are even making its drivers switch to other EV brands in 2025.
In fact, about 50% of the orders Lucid (LCID) received in recent months came from former Tesla owners, according to its top boss, Marc Winterhoff.
Still, Stephen Gengaro – a Stifel analyst – remains bullish as ever on TSLA shares.
Tesla Stock Is Better Positioned to Weather Tariffs
Gengaro does not expect Musk's 'missteps' to leave a lasting impact on the Tesla share price.
He recommends capitalizing on the year-to-date decline in the EV stock as it's significantly better positioned than other automakers to weather President Donald Trump's recently announced a 25% tariff on all imported vehicles.
'We expect share price volatility to persist in near term, but remain optimistic on TSLA's medium to long-term prospects,' the analyst told clients in a research note this week.
Gengaro's 'buy' rating on Tesla stock comes with a price target of $455 that indicates potential upside of about 65% from current levels.
TSLA Shares Could Benefit from FSD Launch
Tesla is committed to launching new, more affordable electric vehicles in the coming months to mitigate the sales decline that's been adding to pressure on its stock price this year.
By June, the multinational is expected to introduce unsupervised full self-driving in Texas, which may also help unlock significant further upside in TSLA shares, the Stifel analyst argued.
Finally, he sees the company's energy storage business serving as a catalyst as well. Note that Tesla stock is currently down more than 40% versus its record high in December 2024.
Wall Street Believes in Tesla's Ability to Recover
Tesla's ongoing challenges have made several analysts lower their price target on the EV stock in recent weeks.
Still, the mean target on TSLA shares currently sits at $334 that indicates potential upside of more than 20% from here.
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