Tesla (NasdaqGS:TSLA) Declines 11% Following Tesla Semi Deal with WattEV

Simply Wall St · 4d ago

Tesla (NasdaqGS:TSLA) recently encountered rumors suggesting a potential investment in Nissan, despite Elon Musk's denial, alongside reports of a confirmed deal with WattEV for Tesla Semi trucks. Concurrently, the broader market has been under pressure, with key indices like the Nasdaq slumping due to economic concerns and lingering tariff impacts from policies under the Trump administration. This environment has contributed to Tesla's share decline of 11% over the past week. The tech sector’s performance, particularly notable since companies such as Adobe and Meta experienced significant declines, also mirrors the pressure faced by Tesla during this period. Amidst these developments, the S&P 500 and Nasdaq have recorded declines from their recent highs, reflecting slower economic activities and subdued investor sentiment. These market conditions have added to the downward pressure on Tesla's stock, highlighting how macroeconomic trends and sector-specific movements are impacting the company's short-term share price performance.

The valuation report we've compiled suggests that Tesla's current price could be inflated.

NasdaqGS:TSLA Earnings Per Share Growth as at Mar 2025
NasdaqGS:TSLA Earnings Per Share Growth as at Mar 2025

Ready For A Different Approach? Trump's latest tariffs commencing in March 2025 are putting pressure on the stock market. Discover which defensive stocks and companies with strong pricing power and economic moats are the best positioned to withstand the trade war.

The past five years have seen Tesla's on-market total returns reach very large levels, signaling remarkable growth and positioning the company prominently within the automotive industry. Despite certain valuation concerns, Tesla outperformed the US Auto industry in the past year. Several factors have underscored this exceptional performance, notably its transition to profitability, with annual earnings growth gaining momentum over the period. Additionally, an agreement with General Motors to provide access to Tesla's Supercharger network further expanded its influence in the electric vehicle arena, enhancing its market appeal.

While Tesla achieved growth, it hasn't been without challenges. Legal issues emerged, including a significant lawsuit resulting in US$42 million in damages. Financially, Tesla experienced fluctuations, as evident from its Q4 2024 results, where net income declined to US$2.3 billion. Restructuring efforts, such as reducing global headcount by over 10% last year, aimed to streamline costs amid changing business dynamics. These elements have shaped Tesla's journey, marking a complex yet impactful trajectory.

Are you invested in Tesla already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.