TLDR
- Tesla stock is down about 9% year to date, trading at $404.58 in early Thursday trading
- Retail investors are buying the dip — Tesla was the fourth-most-purchased stock last week
- Retail investors hold around 40% of Tesla stock, roughly twice the level of other large tech stocks
- Tesla trades at 210 times estimated 2026 earnings, keeping valuation concerns front and center
- Tesla plans to expand its robotaxi service to nine cities in the first half of 2026, up from one currently
Tesla $TSLA is down about 9% year to date, trading around $404 on Thursday, even as retail investors keep buying. The stock slipped 1.6% in early trading while the S&P 500 and Dow both fell around 0.4%.
The dip comes roughly six weeks after Tesla posted better-than-expected Q4 earnings on January 28. Since that report, shares are still down about 6%.
So why the slide? Valuation is a big part of the story. Tesla currently trades at around 210 times estimated 2026 earnings. That kind of multiple leaves little room for error, and some investors appear to be waiting for a fresh catalyst before adding exposure.
Despite that, retail investors are not walking away. According to JPMorgan strategist Arun Jain, retail buyers added to Tesla positions last week, making it the fourth-most-purchased stock behind Nvidia, Amazon, and Microsoft. Retail investors hold around 40% of Tesla stock — about twice the level seen in other large-cap tech names, according to Bloomberg.
Retail Buyers Hold Firm
The broader Magnificent Seven basket has had a rough start to 2026. The Roundhill Magnificent Seven ETF is down more than 6% so far this year, underperforming the S&P 500 by around seven percentage points. But retail investors have stayed committed to the group, continuing to add to names like Nvidia, Amazon, Microsoft, Tesla, Sandisk, and Micron.
Whether that retail conviction translates into a near-term recovery for Tesla is unclear.
Looking back at 2025, Tesla posted its first-ever annual revenue decline, down 3% overall. Automotive revenue fell 10%, and reported income dropped 60%. The Model S and Model X are being discontinued. The Cybertruck, along with those two models, accounted for just 3% of deliveries last year.
Despite all of that, Tesla stock is up 16% over the past 12 months. The market has been pricing in what comes next, not what just happened.
Robotaxis and Robotics Take Center Stage
The near-term catalyst many are watching is the robotaxi expansion. Tesla currently operates its commercial robotaxi service in Austin, Texas. It plans to expand to nine cities in the first half of 2026.
The Cybercab is set to kick off production in April. Tesla’s Fremont facility will also shift from producing the Model S and Model Y to manufacturing Optimus humanoid robots next quarter.
On the revenue side, energy generation and storage grew 25% in 2025, and services revenue rose 18%, helping offset the automotive decline.
Analysts expect Tesla’s total revenue to grow 9% in 2026, which would push it past $100 billion in annual sales for the first time. Margins are expected to widen even as major product rollouts ramp up.
Analyst price targets range from $125 on the low end to $600 on the high end. The mean target sits at $421.73, about 3% above current levels.
As of February 19, Tesla was trading at $412.81.
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