Analysts predict 24% and 66% decline in Apple and Tesla stocks by 2025

From Nasdaq: 2025-01-11 04:25:00

Apple (NASDAQ: AAPL) shares have risen 34% in the past year, driven by valuation multiple expansion rather than earnings growth. Wall Street analysts, like Tim Long at Barclays, have turned bearish, initiating a sell rating with a $184 target, implying 24% downside from the current share price of $243.

Tesla (NASDAQ: TSLA) shares have surged 66% in the past year, fueled by expectations of benefits from ties between CEO Elon Musk and President-elect Donald Trump. Analysts, like Ryan Brinkman at J.P. Morgan, maintain a sell rating with a $135 target, suggesting 66% downside from the current share price of $395.

Apple’s market leadership in smartphones and strong services business are key investment theses. However, excitement over Apple Intelligence driving iPhone upgrades has not materialized. Analysts expect adjusted earnings to increase by 9% in fiscal 2025, making the current valuation of 35.9 times adjusted earnings unsustainably high.

Tesla’s investment thesis revolves around potential market share gains with a sub-$30,000 vehicle and opportunities in self-driving software and robotaxi services. Analysts project adjusted earnings to grow at 27% annually through 2025, but the current valuation of 164 times adjusted earnings looks overly expensive.

Investors should carefully consider the risks associated with Tesla’s valuation, heavily reliant on future revenue streams like self-driving technology. Those confident in Tesla’s disruptive potential may consider buying a small position, while cautious investors should avoid the stock. Consider diversifying with the 10 best stocks identified by the Motley Fool Stock Advisor team.



Read more at Nasdaq: 2 Popular AI Stocks to Sell Before They Drop 24% and 66% in 2025, According to Certain Wall Street Analysts