Tesla Stock Plummets 2.35% on Record $367.83 Billion Trading Volume Amid Valuation Concerns

On June 24, 2025, Tesla (TSLA) experienced a significant drop in its stock price, closing at $340.47, a decrease of 2.35%. The trading volume for the day was substantial, reaching $367.83 billion, making it the highest traded stock of the day.

Tesla's recent robotaxi launch has sparked debate among analysts regarding the company's valuation. Chad Morganlander, a senior portfolio manager at Washington Crossing Advisors, described the stock's valuation as "insane," noting that it trades at ten times its revenue. This valuation seems to already factor in thousands of driverless Teslas operating in the US, each collecting less than $10 per trip. Morganlander expressed skepticism about the feasibility of Tesla's robotaxi service, preferring established competitors like Alphabet's Waymo.

The disconnect between Tesla's valuation and its fundamentals is evident in its lofty forward price-to-earnings multiple of 178 times, compared to the S&P 500's roughly 21 times. This discrepancy is further highlighted by the significant decline in consensus earnings per share (EPS) estimates for Tesla over the past year. JPMorgan auto analyst Ryan Brinkman reported that EPS estimates for 2025, 2026, and 2027 have plummeted by 77%, 70%, and 71% respectively since October 2022.

Additionally, the potential loss of EV tax credits under the Trump administration poses a significant threat to Tesla's sales and profits. These tax credits currently account for about 52% of Tesla's profits, according to Brinkman. The removal of these subsidies could severely impact the company's financial performance. Furthermore, Tesla's first-quarter earnings report in April showed top and bottom line misses due to waning EV demand and controversies surrounding CEO Elon Musk's political activities.

Market strategists continue to question Tesla's high valuation, with concerns about the stock trading at ten times revenue post-robotaxi launch. Tim Urbanowicz, chief investment strategist at Innovator ETFs, cautioned that Tesla's growth may not materialize as quickly as investors anticipate, emphasizing the need for a more cautious approach.