Tesla’s Make-or-Break Year: Can Elon Musk’s Vision Reviv

Tesla, Inc. (NASDAQ: TSLA) has always been a unique player in the automotive industry, largely thanks to CEO Elon Musk’s bold visions of the future. The company’s valuation has often been driven by the belief that it is charting a distinct path forward, different from traditional automobile manufacturers. However, despite the excitement around Musk’s futuristic ideas, the company is currently facing some challenges that could impact its stock.

The Realities Facing Tesla

Tesla’s story has been closely tied to the promises of revolutionary technologies, including robotaxis and humanoid robots. While these ambitious ideas captivate many investors, real-world concerns have emerged.

• Slowing EV Deliveries: Tesla’s electric vehicle (EV) deliveries have slowed, with year-over-year figures in 2024 showing a decline.
• Shrinking Margins: The company’s Q4 GAAP gross profit margins fell to 16.3%, down from 19.8% in the previous quarter, raising further concerns about its financial health.

These factors have contributed to a recent dip in Tesla’s stock, with shares falling by double digits since the company reported its Q4 earnings. The question on many investors’ minds is whether the Musk magic is starting to fade.

James Foord’s Perspective: One Last Chance for Tesla

Top investor James Foord, who is ranked among the top 3% of stock professionals on TipRanks, is willing to give Tesla one final opportunity.

• Foord views 2025 as a make-or-break year for the company. He is prepared to hold Tesla stock for the next two quarters to see if Musk’s ambitious plans can begin to show results. If these plans don’t materialize, Foord is ready to move on.
• The investor sees several growth catalysts for Tesla in the near future, including:
  • The launch of the more affordable Model 2, aimed at lower-income buyers.
  • The revamping of the popular Model Y vehicles.
  • Full production capacity of Cybertrucks scheduled for 2025.

Foord believes these developments could spark growth in Tesla during Q2 and Q3 of 2025. However, if there’s no growth by then, Foord warns that the company could be in trouble.

Robotaxi and AI Developments: Potential Game Changers

Another interesting aspect of Tesla’s future is the potential for robotaxis. Foord is intrigued by this possibility, noting that Tesla’s existing fleet of vehicles could allow the company to rapidly deploy robotaxis at scale once the technology is ready and regulatory approvals are secured.

• Additionally, Foord sees AI advancements as a major opportunity for Tesla, particularly in building the Physical AI needed to develop humanoid robots. While this may not be a catalyst in 2025, Foord believes it’s an opportunity that could shape Tesla’s future.

“Every breakthrough in AI technology is a boon for Tesla,” Foord says. “At the rate the breakthroughs have been coming, who knows, maybe Elon Musk will for once meet his timeline.”

Wall Street’s Consensus on Tesla Stock

While Foord remains optimistic about Tesla’s potential, Wall Street is more divided.

• Consensus Rating: Tesla currently holds a Hold (Neutral) consensus rating from analysts, with 13 Buy, 12 Hold, and 10 Sell recommendations.
• Price Target: The average 12-month price target for Tesla is $340.50, implying minimal movement in the stock over the next year.

Important Highlights

• Investor Sentiment: Top investor James Foord sees 2025 as crucial for Tesla’s future and is giving the company one last chance to prove itself.
• Growth Catalysts: Tesla’s affordable Model 2, refreshed Model Y, and ramped-up Cybertruck production are seen as key drivers for growth.
• Robotaxi and AI Potential: Tesla’s developments in robotaxi technology and AI could offer significant growth opportunities in the future.
• Wall Street Consensus: Tesla holds a Neutral consensus rating with an average price target of $340.50, suggesting limited movement in the stock over the next year.