TLDR
- Tesla stock dropped 6.6% on Thursday to close at $401.99, with trading volume up 17% above average levels
- ARK Invest sold Tesla shares for four consecutive sessions through November 13, marking an unusual move from the long-term bull
- The company beat Q3 earnings expectations with $0.50 EPS versus $0.48 consensus and revenue of $28.10 billion versus $24.98 billion expected
- Analysts maintain a “Hold” rating with average price target of $391.08, though Morgan Stanley’s Adam Jonas keeps his $410 target and Buy rating
- Tesla stock has fallen 6% for the week, leaving shares down less than 1% for the year but up 22% over the past 12 months
Tesla stock took a beating on Thursday, dropping 6.6% to close at $401.99. The stock opened at $430.60 before sliding throughout the day. Trading volume jumped to 117.6 million shares, which came in 17% higher than the typical daily average.
The decline put Tesla below a key technical marker. Shares now trade under the 50-day moving average of $425.40. That level had been holding up the stock in recent weeks.
Coming into Friday, Tesla stock was down 6% for the week. Shares are now down less than 1% for the year. Over the past 12 months, the stock is still up 22%.
The selling pressure came from an unexpected source. Cathie Wood’s ARK Invest dumped Tesla shares for four straight trading sessions through November 13. This marks one of the longest sustained selling streaks from the prominent Tesla bull.
Tesla remains ARK’s largest holding despite the recent sales. The stock represents 11.96% of the ARK Innovation ETF and 9.69% of the ARK Invest Next Generation Internet ETF. ARK maintains public price targets above $2,600 by 2029.
The recent selling pattern raises questions. It could signal profit-taking or concern about short-term obstacles.
Insider activity shows a similar pattern. CFO Vaibhav Taneja sold 2,606 shares in September for $918,302. Director James R. Murdoch unloaded 120,000 shares in August for $42 million.
Third Quarter Performance
Tesla reported third-quarter earnings on October 23 that beat expectations. The company posted $0.50 earnings per share, topping the $0.48 consensus by two cents.
Revenue hit $28.10 billion, beating analyst estimates of $24.98 billion. This marked an 11.6% increase from the same quarter in 2024.
The earnings beat came with trade-offs. Margin compression from aggressive price cuts showed up in the numbers. Tesla has been cutting prices to defend market share, which puts pressure on profitability.
The company’s valuation remains stretched. Tesla trades at a price-to-earnings ratio of 267.99. Market capitalization stands at $1.34 trillion.
Analyst Views and Future Predictions
Wall Street analysts remain divided on Tesla. The stock carries a consensus “Hold” rating with an average price target of $391.08.
TD Cowen rates Tesla a “Buy” with a $509 price target. Guggenheim maintains a “Sell” rating with a $175 target. DBS Bank upgraded shares to “Hold” on November 5.
The breakdown includes one Strong Buy rating, 21 Buy ratings, 13 Hold ratings, and 10 Sell ratings.
Morgan Stanley analyst Adam Jonas maintains a Buy rating with a $410 price target. Jonas recently made predictions about robotics for 2026.
Jonas doesn’t see 2026 as the year humanoid robots take off. “For 2026, at least, humanoids are more of a marketing and funding strategy than doing useful work,” he wrote in a recent report.
He’s more optimistic about robo-taxis. “2026 is the year when robotaxis cross over from science fiction to reality with consumers, investors, urban planners, and transport authorities,” Jonas wrote.
Jonas also predicts Tesla and xAI will work more closely together. xAI is Elon Musk’s AI company that owns X and operates ChatGPT competitor Grok. Tesla needs computing power to build AI applications, and xAI has plenty of it.
Tesla stock was down 2.4% early Friday at $392.24. The S&P 500 was down 0.8% and the Dow Jones Industrial Average fell 1.1%.
Analysts forecast Tesla will earn $2.56 per share for the current fiscal year. Institutional investors own 66.20% of outstanding shares.
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