Potential challenges for Tesla stock due to robotaxi launch, weak quarterly report, and high valuation concerns.

From Yahoo Finance: 2025-06-15 07:00:00

Elon Musk and President Trump’s public feud may be over, but the debate over Tesla’s stock intensifies ahead of the robotaxi launch and weak quarterly report. Tesla shares dropped 8% in June amid investor fears of Trump targeting Musk’s businesses and a disconnect between valuation and fundamentals.

The spat between Musk and Trump highlights Tesla’s stock dilemma as Musk attempts to revive the struggling EV business. Despite a 12% rise in stock value, EPS estimates for 2025-2027 have plummeted, raising concerns about Tesla’s high valuation compared to the market.

Tesla’s stock faces scrutiny with a forward P/E multiple of 166 compared to the S&P 500’s 22. The removal of EV tax credits could impact Tesla’s profits significantly, with subsidies currently making up 52% of profits, according to JPMorgan analyst Ryan Brinkman.

Brinkman anticipates a drop in financial estimates as the EV subsidy’s impact becomes clearer, questioning the sustainability of the post-election Tesla rally. The stock’s inflated value may not hold up against higher interest rates and market shifts, leading to a potential correction.

As the economy is assessed at the Cannes Lions festival, the Yahoo Finance Invest conference in November approaches. With Tesla’s stock facing challenges and uncertainties, the market awaits potential corrections and shifts in investor sentiment. Stay tuned for more updates on Yahoo Finance.

Read more: After Trump-Musk feud, here’s the next issue for Tesla stock