That is the electric-vehicle maker's problem. There isn't any trend. Through Thursday trading, shares had dropped five of the past 10 days, gaining about 2%.
On Thursday, the stock closed down 3.4% at $413.82. The S&P 500 and Dow Jones Industrial Average both dropped about 0.2%.
Shares are developing a new trading range. That isn't all bad. In 2024, the stock had trouble breaking definitively above $270, until the election.
After the election, shares traded all the way to $479.8, a record closing high, on Dec. 17 before dropping 21% to $379.28 on Jan. 2. Those prices -- $380 to $480 -- are reasonable limits on Tesla's new range. Both numbers are much higher than the $270 resistance investors lived with for much of the past year.
That is the good news.
The bad news is the market always wants more. Tesla stock needs something to change investors' thinking about valuation and earnings growth. (Shares trade for about 130 times estimated 2025 earnings.)
The next catalyst probably needs to be something beyond the potential for President-elect Donald Trump to streamline the process for obtaining a self-driving robotaxi license, which would help it as it seeks to launch a self-driving robotaxi service late in 2025. The benefits to the stock from that have been used up. They are a big reason why Tesla's stock has been up since the election.
The same is true of the lower-priced model due in early 2025. Everyone already expects that car.
Future Fund Active ETF cofounder and Tesla shareholder Gary Black has a couple of ideas for new drivers for the stock. A big one would be another automaker licensing Tesla's self-driving technology. That would be a validation of Tesla's tech and another way for Tesla to make money from its AI-trained autonomous driving expertise.
Tesla also uses AI to train humanoid robots. Starting to sell robots in late 2025 or early 2026 would be another significant boost for Tesla shares, says Black. Wall Street doesn't have a lot of robot-related sales and earnings embedded in earnings models yet.
There can, of course, be negative catalysts too. "Fundamentals are weak and IRA repeal is a material risk to demand and margins in 2025" wrote Wells Fargo analyst Colin Langan in a Wednesday report, referring to the Inflation Reduction Act.
The IRA is the law that provided the $7,500 federal purchase tax credit for qualifying EV purchases. Trump is expected to eliminate the credit, making buying an EV, even a Tesla EV, more expensive for most buyers.
As for fundamentals, interest rates remain persistently high, hurting car demand. EV sales growth has slowed dramatically. Americans bought about 1.3 million all-electric cars in 2024, up about 7% compared with 2023. Sales are still increasing, but EV sales jumped about 46% in 2023 compared with 2022.
Langan rates shares Sell and has a $125 target price for Tesla stock. Investors typically don't publish stock price targets, but Black does: $380 a share.
The $255 difference amounts to some $820 billion in market value, a big enough gap to drive more than two Toyota Motors through. Toyota, the biggest carmaker by sales worldwide, has a market capitalization of just $250 billion.
Black's target is below where the stock trades but he still owns shares. He expects things to break better for the company. The risk/reward ratio "remains skewed to the upside," he said.