Tesla’s stock price skyrocketed by over 8% on Wednesday.
After climbing 3.8% the previous day, Tesla shares surged $18.73 (8.12%) to $249.31.
The stock boost was fueled by the effect of Tesla’s advertisement event at the White House, hosted by U.S. President Donald Trump the previous afternoon, where he expressed his support for Tesla CEO Elon Musk, the head of the Department of Government Efficiency (DOGE).
On Tuesday morning, Trump announced via social media that he would purchase a Tesla vehicle. That afternoon, he laid an advertisement board for Tesla at the White House.
However, experts have mixed forecasts.
Some analysts are optimistic that Republican supporters will fill the gap left by the progressive Democrats, Tesla’s core consumer group.
Some also argue that Tesla’s stock is known for its volatility, suggesting that the current drop might be a prime buying opportunity.
On the other hand, some are pessimistic that Tesla has broken its trend line, indicating that this rebound may be short-lived.
Republican voters emerge as Tesla’s new potential customers
Gary Black, co-founder of the ETF Future Fund Active, sees a silver lining in Trump’s Tesla promotion, believing it has opened doors to a new consumer base.
Black noted that Republican voters, who previously hesitated to buy electric vehicles, may now be warming up to Tesla. He estimates that the 77 million people who voted for Trump in the recent election could become potential Tesla customers following the White House event.
CFRA analyst Garrett Nelson stated that Tesla’s stock volatility is not unusual, as the pattern regularly repeats for Tesla. He predicts that the current downturn will eventually lead to a surge in stock prices.
Nelson still recommended buying Tesla despite lowering its earnings per share (EPS) forecast from $2.90 to $2.50 and slashing the target price from $540 to $385.
He emphasized that selling pressure on Tesla has historically turned into buying opportunities that brought substantial gains for investors.
Skeptics predict a short-term rebound
In contrast, on Tuesday, Guggenheim analyst Ronald Jewsikow advised selling Tesla shares in his research note, lowering his price target to $170.
Jewsikow forecasts Tesla’s first-quarter deliveries will fall short of market expectations, revising his estimate from 405,000 to 358,000 units.
Josh Brown, CEO of Ritholtz Asset Management, cautioned against chasing the current rebound, warning that Tesla has technically broken its trend line.
According to CNBC, Brown, an influential chart analyst, noted that Tesla’s technical indicators have collapsed. He said that while the recent sell-off has halved Tesla’s price-to-earnings ratio (PER), it remains high at 113 and continues to rise.
He stressed that any Tesla rebound is likely to be short-lived.
