Tesla Inc (TSLA) Stock: Shares Rise Despite Trump-Musk Political Tensions

TLDR

Table of Contents

Tesla stock rose 1% in premarket trading Wednesday to $347.71 after CEO Elon Musk criticized President Trump’s tax bill, causing afternoon volatility Tuesday
Musk recently announced stepping away from his government role with DOGE to refocus on Tesla, coinciding with the upcoming June 12 Robotaxi launch in Austin
Tesla shares are up 45% since the April 22 earnings call but down 15% year-to-date, with the stock surging 23% in May alone
Analysts like Cathie Wood ($2,600 target) and Dan Ives ($500 target) remain bullish on Tesla’s autonomous driving potential despite current business challenges
Tesla trades at a forward P/E of 181 while facing declining EV segment performance and increased competition from rivals like Rivian and BYD

Tesla shares climbed 1% to $347.71 in Wednesday premarket trading as investors digest the latest drama between CEO Elon Musk and President Donald Trump. The electric vehicle maker’s stock has become a political soap opera, with Musk’s public criticism of Trump’s tax bill sending shares tumbling $10 Tuesday afternoon.

“This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,” Musk tweeted Tuesday. The harsh words came just as Tesla was gaining momentum ahead of its robotaxi service launch.

I’m sorry, but I just can’t stand it anymore.
This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination.
Shame on those who voted for it: you know you did wrong. You know it.
— Elon Musk (@elonmusk) June 3, 2025

Tesla investors have grown accustomed to volatility tied to their CEO’s political activities. Coming into Wednesday, shares were down 15% year-to-date despite a 95% gain over the past 12 months.

The stock has bounced 45% since Tesla’s April 22 earnings call. On that call, Musk promised to spend less time in Washington and more time running his companies.

Musk Steps Back from Government Role

Musk recently announced he’s stepping away from his role with the Department of Government Efficiency (DOGE). His government work had diverted attention from Tesla at a critical time for the company.

The timing appears strategic. Tesla’s highly anticipated robotaxi service launches June 12 in Austin, Texas.

Musk’s divided attention contributed to Tesla’s struggles earlier this year. The stock was down over 50% from its all-time high as recently as mid-April.

His return to full-time Tesla duties has energized investors. The stock surged 23% in May, outpacing other Magnificent Seven stocks.

Tesla’s core electric vehicle business faces headwinds. Revenue declined in the first quarter as competition intensifies from companies like Rivian and China’s BYD.

Consumer demand has weakened partly due to Musk’s polarizing political activities. His government role created additional challenges for Tesla’s brand appeal.

Analysts Split on Valuation

Wall Street bulls remain optimistic about Tesla’s autonomous driving potential. Cathie Wood of Ark Invest maintains her $2,600 price target.

Wedbush’s Dan Ives raised his forecast to $500 per share. Both analysts believe robotaxi technology could unlock massive value.

However, skeptics point to Tesla’s stretched valuation. The company trades at a forward price-to-earnings ratio of 181.

That’s expensive for any growth stock, especially one with declining revenue. Tesla’s business fundamentals don’t support the current stock price, critics argue.

Musk himself tempered expectations for the robotaxi launch. He told investors the initial deployment will be modest and won’t contribute major revenue for at least a year.

The disconnect between hype and reality creates risk for investors. Tesla’s stock price has become more tied to Musk’s activities than actual business performance.

Political tensions between Trump and Musk could create additional volatility. The two have disagreed before on issues like tariffs.

Tesla investors will need to navigate both political drama and business fundamentals. The robotaxi launch represents a key test for the company’s autonomous driving ambitions.

Current market conditions favor momentum stocks like Tesla. The S&P 500 and Nasdaq gained 5% and 8% respectively in May.

Tesla’s recent 23% monthly surge reflects broader market optimism about AI and autonomous vehicle technology. Whether this momentum continues depends partly on the robotaxi launch success.

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