Tesla Faces 60% Downside Call From JPMorgan as ARK Buys More Shares

Tesla stock is pulling in two very different directions. On one side, analysts are questioning the firm’s short-term outlook. But on the other hand, long-term investors are still pocketing more shares. The latest call from JPMorgan has made this divide more visible. This puts fresh pressure on sentiment just as the stock tries to hold onto gains from last year.

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TSLA Price Target Cut as ARK Doubles Down on Tesla Stock

The latest JPMorgan note on Tesla is clear. The bank has kept its sell rating and set a $145 TSLA price target. This shows a close to 60% downside from current levels. The call came after Tesla reported first-quarter deliveries of 358,023 vehicles. These missed estimates are around 366,000 to 370,000 units.

The miss is part of a bigger concern. Tesla produced over 408,000 vehicles in the quarter. This means more than 50,000 units were left unsold. The gap is raising fresh questions around Tesla’s demand as growth seems to be uneven.

JPMorgan also pointed to a longer-term issue. Financial expectations for Tesla have come down over the past couple of years. This is even as Tesla stock has surged more than 50% in that time. The bank said current valuations depend on stronger performance later on.

JPMorgan analyst Ryan Brinkman wrote,

“With expectations for Tesla performance having collapsed for all financial and performance metrics across all time periods through the end of the decade, the +50% rise in Tesla shares and +32% increase in analyst price targets as this collapse has taken place implies an expectation for a sharp pivot to materially better than earlier expected performance in the time beyond this decade.”

Other firms were also seen adjusting as well. Goldman Sachs and Truist have both trimmed their forecasts following the delivery data. It should be noted that Tesla stock is already down about 20% year-to-date. Currently, TSLA sits at $352.82 following a 2.15% drop over the past day.

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ARK Adds to Tesla Position Despite Bearish Calls

At the same time, ARK’s Tesla positioning shows a different view. ARK Invest recently bought close to 40,000 shares of Tesla across its ETFs, adding to its position. The firm continues to back Tesla’s long-term potential. Cathie Wood’s firm seems to be tying its outlook to future businesses like robotaxis and AI. The firm sees these as key drivers of valuation over the next decade.

Meanwhile, market commentary is also reflecting the divide. Jim Cramer pointed out how JPMorgan’s bearish call could push some investors to rethink their Tesla positions. He suggested a possible rotation into other Elon Musk-linked bets. He suggested that the growing buzz around a potential SpaceX IPO could catch the attention of investors.

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