What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) fell 3.8% in the morning session after investor concerns grew as one of the United States' largest pension funds, the California Public Employees' Retirement System (Calpers), stated it would vote against CEO Elon Musk's 2025 performance award.
A Calpers spokesperson criticized the scale of the proposed deal, noting it was significantly larger than packages for CEOs at comparable companies and would concentrate more power in a single shareholder. Compounding the negative sentiment, Tesla dealt with its tenth recall for the Cybertruck. This latest recall of 6,197 vehicles was due to a potential issue with an off-road light bar accessory that could detach. Additionally, reports surfaced that the company was lagging in getting regulatory approval to begin offering its robotaxi service in Arizona and Nevada, two states targeted for expansion.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Tesla? Access our full analysis report here.
What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 5.2% on the news that Cantor Fitzgerald raised its price target on the stock to $510 from $355, while reaffirming its "Overweight" rating. Analyst Andres Sheppard pointed to several key drivers for the new valuation, including upcoming production milestones for the company's Cybercab, Semi truck, and Optimus robot. The analyst also noted expanding opportunities in Tesla's Energy and Full Self-Driving software businesses. Adding to the positive mood, investor sentiment was also lifted by progress in U.S.–China trade talks. A better trade relationship could ease costs for Tesla's key Shanghai factory, which is central to its global production.
Tesla is up 16.8% since the beginning of the year, and at $443.01 per share, it is trading close to its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $3,425.
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