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More Reading from MarketBeat
Tesla: Why Things Could Get Worse Before They Get BetterWritten by Sam Quirke. Published: 4/13/2026. 
Key Points
- Tesla shares have had a rough first quarter and remain under pressure after this week’s weak delivery data.
- Analyst opinion is sharply divided, with recent price action pointing to further downside risk in the near-term.
- However, with earnings approaching and sentiment close to rock bottom, the setup could still favor a sharp rebound if the report is strong enough.
- Special Report: Elon Musk’s $1 Quadrillion AI IPO
Shares of automotive giant Tesla Inc. (NASDAQ: TSLA) trade around $345, down roughly 30% from December highs and stuck in a grinding downtrend that shows little sign of reversing. What began as a healthy pullback in January has increasingly resembled a more durable decline, with each rally being sold into and lower lows being set. At the start of the year, there was a clear narrative shift underway. Investors were beginning to position Tesla as a robotics and automation company rather than solely an electric vehicle (EV) manufacturer. That reframing supported the company’s triple-digit valuation and resilient bullish sentiment, but in recent weeks that optimism has started to fade. This week’s weak delivery data has refocused attention on the core automotive business. With little meaningful evidence so far that the pivot to automation is producing near-term results, bulls have less to hold onto. With under two weeks until the company’s next earnings report, it looks possible things could get worse before they get better. Weak Deliveries Bring Focus Back to the Core Business
SpaceX is preparing an offering that could raise $50 billion in a single day - and Bloomberg reports it's already forcing other companies to delay their own IPOs.
Citigroup just joined the underwriting team. But the real positioning isn't in the IPO itself - it's in the one chokepoint supplier that SpaceX's $1.75 trillion empire depends on to stay operational. See what insiders are buying before the SpaceX IPO hits
This week’s delivery report was a blow to Tesla investors, arriving after what had already been a brutal first quarter. Expectations weren’t particularly high, but the numbers were still disappointing, reinforcing concerns about slowing demand and rising competition in the EV market. When Wall Street was fully backing Tesla’s long-term autonomy and AI narrative, short-term delivery fluctuations were easier to overlook. Now that the narrative has lost momentum, investors are re-anchoring their expectations to the company’s core automotive performance. A Premium Valuation Means Even Less Room for ErrorThis would be less concerning if Tesla’s valuation weren’t still relatively frothy even after the pullback. With a price-to-earnings ratio sitting well above 300, the stock is priced for significant future growth, leaving little room for disappointing updates like this week’s delivery report or further uncertainty around the path to profitability for its autonomy and robotics plans. That said, some analysts still believe in the company’s long-term potential. Only this past week, the team at Deutsche Bank was reiterating its Buy rating, arguing the current weakness represents an opportunity. That view must be weighed against JPMorgan’s recent move to reiterate its Sell rating, which echoed BNP Paribas’ stance last month. Price Action Suggests More Pain Could Be ComingBears argue that weakening fundamentals plus a premium valuation is a risky combination. The chart’s ongoing downtrend, which saw fresh lows this week, supports that view. Technically, the stock has been making a series of lower highs and lower lows since December, and until that pattern shows signs of changing, it’s difficult to be bullish. At the same time, sentiment is growing increasingly negative, with the stock’s relative strength index flirting with extremely oversold levels. That creates an interesting setup for sidelined investors. On one hand, the fundamentals and price action point to further downside risk. On the other, you could argue the worst-case scenario is close to being priced in. Historically, Tesla has a record of rallying from moments of peak bearish conviction, proving naysayers wrong. Earnings Will Be KeyThe company’s upcoming earnings report, due on April 22, takes on added importance. With expectations lowered and sentiment near multi-month lows, the potential for an upside surprise is limited but not impossible. Investors will be watching for signs that the company’s longer-term strategy around autonomy, robotics, and AI is beginning to translate into tangible progress. At the same time, updates on margins and EV demand trends will be critical in assessing whether the core business is stabilizing. If Tesla can deliver modestly better-than-expected results and provide a clearer path forward, the stock could begin to find demand. Conversely, if the report fails to reassure, or reinforces current concerns, the existing downtrend could push the stock to fresh lows. Given the premium multiple, the market is unlikely to be forgiving. |
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