Tesla's 40% Decline Seen as Temporary Retracement by Fundstrat's Tom Lee

Fundstrat's head of research, Tom Lee, has maintained his optimistic outlook on Tesla (TSLA) despite the recent public feud between billionaire Elon Musk and former U.S. President Donald Trump. In a recent video update, Lee presented a long-term chart for TSLA, which shows that the stock's recent 40% decline from its all-time highs is simply retouching a support level observed in previous years. Lee emphasized that Tesla investors are accustomed to such fluctuations, and when viewed from a long-term perspective—from 2010 to the present, when the stock price rose from $1 to $280—this recent decline appears to be a temporary retracement to a support level. Therefore, Lee believes that the long-term outlook for Tesla remains largely unchanged.

Lee highlighted several fundamental strengths that continue to support Tesla's position in the market. He noted that Tesla maintains a competitive edge in electric vehicle (EV) design and manufacturing. Additionally, the company is on the verge of launching a robotaxi product, which is scheduled to begin next week. This robotaxi is expected to be significantly more cost-effective than its nearest competitor, costing roughly one-fourth as much. Furthermore, Tesla is planning to introduce Optimus Robots and potentially drones in the future. Lee also mentioned the possibility of Tesla merging with xAI, its artificial intelligence unit, which owns the platform X.com, formerly known as Twitter. According to Lee, the suite of products and potential mergers positions Tesla with unmatched advantages in the market, making the recent price dip a minor concern for Fundstrat.

Lee's analysis suggests that despite the recent feud between Musk and Trump, the fundamental strengths of Tesla remain intact. The company's leadership in EV design and manufacturing, along with its innovative product pipeline, including the robotaxi and Optimus Robots, continue to drive its competitive advantage. Additionally, the potential merger with xAI adds another layer of strategic value to Tesla's portfolio. Lee's long-term view of Tesla's stock performance, which has seen significant growth from $1 to $280 since 2010, indicates that the recent decline is part of a normal market correction rather than a fundamental shift in the company's prospects. Therefore, Lee remains bullish on Tesla's future, believing that its unmatched advantages will continue to drive its success in the market.