Elon Musk is again back in the spotlight, and this time, it is not for rockets or electric cars but for leading a group of investors in a $97.4 billion bid to take control of OpenAI. His stated goal is to return the company to its “open-source” and “safety-first” roots. With his own AI company, xAI, in play, the stakes are high.
Sam Altman, OpenAI’s CEO, seems less than impressed. He sees Musk’s bid as a strategic attempt to slow down a competitor rather than a genuine takeover offer. Altman made his stance clear with a sharp X post: “No thank you, but we will buy Twitter for $9.74 billion if you want.” The Musk-Altman rivalry runs deep. From co-founding OpenAI to Musk’s failed 2018 takeover bid, tensions have escalated with lawsuits, withdrawals, and re-filings.
With Musk’s OpenAI bid signaling his shifting priorities, Tesla (TSLA) is grappling with slowing EV demand and fierce competition. With Musk’s attention divided, is Tesla still the force it once was, or is it time for investors to rethink their bets? Let’s take a closer look.
About Tesla Stock
Few companies electrify the market quite like Tesla (TSLA). Headquartered in Austin, Texas, and boasting a staggering market cap of $1.1 trillion, TSLA dominates battery-powered electric car sales in the U.S.
The company has come a long way since its initial public offering in 2010. Tesla is no longer just about electric cars. It is making bold moves in artificial intelligence (AI), robotics, and automation, steadily expanding its technological footprint beyond the roads.
TSLA stock took a jolt recently, sliding more than 5% after news surfaced that an Elon Musk-led group of investors placed a bid for a controlling stake in OpenAI. However, despite this temporary setback, Tesla’s long-term trajectory remains strong. Over the past 52 weeks, TSLA has climbed 90.6%.
TSLA may have stumbled recently, but its valuation is sky-high. It is priced at 117.46 times non-GAAP forward earnings and 9.67 times sales, an eye-watering premium over the sector averages. However, the stock trades cheaper than its historical averages.
Tesla Misses on Q4 Earnings
Tesla’s high-speed ride hit a rough patch. After missing Wall Street’s Q4 and full-year 2024 delivery targets in January, the EV giant doubled down with a lackluster Q4 earnings report on Jan. 29.
Revenue inched up just 2% year over year to $25.7 billion, below the $27.1 billion analysts expected. Automotive sales slid 8% annually to $19.8 billion. Tesla blamed the automotive revenue dip on price cuts across its Model 3, Y, S, and X lineup - moves meant to spark demand. Adjusted EPS of $0.73 rose by a modest 3% but fell 4.8% short of estimates.
Despite these challenges, Tesla remains focused on the long term. The company is laying the groundwork for what Elon Musk describes as an “epic” 2026, followed by a “ridiculously good” 2027 and 2028. These ambitions rest on advancements in AI, fully autonomous driving technology, and the development of the Optimus humanoid robot.
Analysts tracking Tesla predict fiscal 2025 EPS to be around $2.54, up 24.5% year over year before surging by another 31.5% annually to $3.34.
What Do Analysts Expect for Tesla Stock?
Adam Jonas, Morgan Stanley’s prominent auto analyst and a long-time Tesla advocate, has removed the firm’s “top pick” designation for the company. He maintains a $430 price target and an “Overweight” rating on the stock. Tesla’s Q4 earnings were largely disappointing, yet he believes they do not significantly alter the company’s overarching narrative.
The latest results reflect a company undergoing a profound shift from a pure automotive manufacturer to a diversified player in AI and robotics. While this transition may be unpredictable, he expects 2025 to be a year when investors further recognize the value of Tesla’s advancements in embodied AI and its growing competitive advantage.
Skepticism toward Tesla does not end there. Stifel’s Stephen Gengaro trimmed Tesla’s target from $492 to $474, still backing a “Buy” rating but flagging risks including Q4 results, Trump-era uncertainty, and Musk’s political drama. Stifel cites data that shows Tesla’s favorability among buyers scraping rock bottom. If the brand’s perception keeps sliding, near-term sales could take a hit.
TSLA stock has a consensus “Hold” rating overall. Among 38 analysts covering TSLA stock, 12 stand firm with a “Strong Buy,” two advocate a “Moderate Buy,” 14 advise a “Hold,” and 10 suggest a “Strong Sell.”
Tesla has a mean target price of $338, below its current trading price. However, the Street-high target of $550 suggests the stock could rally as much as 60% from the current level.
Musk’s OpenAI bid adds another twist to Tesla’s already wild ride. With slowing EV demand, fierce competition, and a divided focus, the stock’s future feels uncertain. Yet, Tesla’s innovation edge remains. Is it a long-term bet or a short-term risk? Investors must decide whether to ride the volatility or park their cash elsewhere.
