Tesla (TSLA) Stock Wipes Out Half Its Gains Today—Here’s What Jed Dorsheimer Predicts Next

Tesla's rally hits a brutal wall—shares surrender half their gains in a single session. The electric vehicle giant's momentum stalls as investors question whether the valuation has finally outpaced reality.

What the analysts see coming

Jed Dorsheimer points to underlying volatility in tech growth stocks, warning that Tesla remains exposed to macroeconomic shifts and production bottlenecks. He suggests the dip might offer a entry point—but only for those with strong risk tolerance.

Tesla's not just a car company anymore; it's a battery, AI, and energy bet wrapped in a stock that behaves like a leveraged crypto ETF. Sometimes it feels like Wall Street is just guessing with a fancy spreadsheet.

Elevate Your Investing Strategy:

• Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.

The frenzy began when investors learned Musk had scooped up nearly $1 billion worth of Tesla stock, his first personal buy since 2020. To many, it was the ultimate show of confidence from Tesla’s CEO, a clear message that he believes in the company’s trajectory despite the noise around slowing EV demand and profitability pressures.

But by midday, the initial wave of buying had collided with profit-taking from traders eager to lock in quick gains. At the same time, old worries resurfaced – chief among them the fact that Tesla’s margins are expected to take a hit as environmental tax credits roll off in the second half of the year. Those credits have been a meaningful boost to Tesla’s bottom line, and their disappearance leaves the company more exposed to cost pressures in a competitive EV landscape.

William Blair analyst Jed Dorsheimer summed up the push and pull in his research note today, noting: “We see this as a clear signal of confidence from Musk.”

Still, Dorsheimer didn’t budge from his Market Perform (i.e., Neutral) rating, even as he admitted to becoming more bullish following the purchase. His hesitation reflects the fine line between recognizing Musk’s confidence and acknowledging that Tesla’s valuation already prices in a lot of future success. (To watch Dorsheimer’s track record, click here)

That’s where the debate shifts to Tesla’s biggest swing factor. Autonomy, and especially robotaxis, remain the wildcard that keeps many investors dreaming. Tesla recently opened its service to the public, and the app quickly climbed to the top of the download charts. Musk insists the latest software update will be two to three times safer than a human driver, a claim that, if true, could transform the company’s prospects. Dorsheimer points out that Tesla’s controversial decision to rebuild its autonomy stack around vision-only neural nets is starting to pay off, with rapid expansion in coverage that rivals took years to achieve.

Even so, Wall Street remains split. Some see Musk’s bold bet on autonomy as the next big growth engine, while others lean toward the sidelines, wary of execution risks and valuation. That divide is reflected in consensus: TipRanks’ database shows TSLA rated as a Hold, with a 12-month average price target of $313.62, implying ~23% downside from current levels. (See)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.