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Today's Featured News Tesla: Some Analysts Are Calling for A 30% Drop—Time to Panic?Written by Sam Quirke. Published 10/18/2025. 
Key Points - Next week’s earnings report could decide whether Tesla’s rally continues into year-end, or collapses.
- Several analysts now see as much as 30% downside from current levels.
- However, bullish voices argue the stock’s long-term AI and robotics story remains intact.
Tesla Inc. (NASDAQ: TSLA) has again become the focal point of a fierce market debate. After rallying nearly 100% since April, the stock has stalled below recent highs and is now trading around $430. With third-quarter earnings due next week, investors are weighing whether this consolidation is healthy or a warning sign. Some analysts are openly calling for a sharp correction, while others remain convinced the long-term story is intact. Either way, the pressure is on. With a price-to-earnings (P/E) ratio near 250, Tesla's valuation leaves little margin for error. The stock has struggled to extend its breakout and macro concerns about a possible tech bubble are spreading; this earnings report could help determine how the rest of the year plays out. Should investors be worried? Let's take a closer look. The Bear Case Is Getting Louder A strange chasm is coming to Wall Street...
It's already creating millionaires and billionaires at the fastest pace in history. CNBC calls it "the largest wealth creation spree in history." Yet 1 in 3 Americans now fear their financial situation is deteriorating. There's only one way to survive, says the man who predicted 2008 and 2020, but sadly it's already too late for many. Everything you need to know is here. The latest call for caution came from teams at Industrial Alliance Securities and Evercore ISI, both of which issued updates with fresh $300 price targets. A recent close around $430 implies roughly 30% downside based on those targets—a bold call with earnings just days away. There's a growing view that Tesla's valuation is stretched, and the company faces mounting pressure to defend market share as competition intensifies. Tesla's margins have been under pressure for several quarters as price cuts persist across the lineup. Although the company delivered a solid Q3 sales report, investors largely faded the move, suggesting expectations are already high. Many also question whether robotaxi and full self-driving promises will meaningfully boost profits anytime soon. Some investors also see echoes of prior peaks. After a comparable rally earlier this year, disappointing Q1 results ended that surge. The concern now is that sentiment has become similarly extended, and even a decent quarter might not satisfy the market. Why the Bulls Aren't Backing Down Despite renewed pessimism, many bulls remain confident. This week Melius Research reiterated its Buy rating and set a $520 price target, implying roughly 20% upside. Royal Bank of Canada also stayed constructive, pointing to the company's long-term growth potential in AI and robotics, including progress on the Optimus humanoid project. The bullish case is that Tesla is more than an automaker: it's a platform business that combines energy, software and artificial intelligence. Its global delivery scale, strong brand and vertical integration create advantages that are difficult for rivals to replicate. Bulls also note that long-term investors have historically stepped in during pullbacks, treating volatility as a buying opportunity. The Real Risk Is Expectations, Not Execution The key question for investors isn't simply whether Tesla is executing — it's whether perfection is already priced in. A P/E ratio around 250 implies investors expect exceptionally rapid earnings growth to continue for years, which is a high bar in a cyclical, capital-intensive industry. Given the recent rally, even a modest disappointment — slower margin improvement or cautious forward guidance — could trigger swift selling. The stock's inability to make new highs in recent weeks suggests traders are increasingly reluctant to chase. In a year when broader optimism has pushed tech valuations higher, Tesla looks particularly exposed. What to Watch in Next Week's Report Investors should focus on a few key items in the upcoming report: whether automotive gross margins have stabilized after several quarters of decline; any concrete updates on revenue paths for robotaxi and Optimus initiatives; and regional trends, especially in Europe and China where competition has ramped up. If earnings confirm that Tesla's core business remains robust and growth initiatives are progressing, the bullish narrative could regain momentum. But if margins disappoint or forward guidance is soft, the $300 targets from Evercore and Industrial Alliance will start to look less extreme. Investors need not panic, but they should temper expectations. Tesla remains a resilient company with strong brand power and deep innovation capabilities. Still, the stock's valuation and recent trading behavior suggest that much of the easy upside may already be priced in.
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