Tesla Inc. was hit with a pair of downgrades on Monday, underscoring mounting concerns on Wall Street about the electric-vehicle maker's outlook following last week's clash between Chief Executive Elon Musk and President Donald Trump.
Both Argus Research and Baird cut the stock to the equivalent of hold ratings, cementing Tesla's reputation as the least-loved megacap stock among analysts. Shares fell 1.6% in premarket trading.
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The downgrades mark the latest hurdle for Tesla, shares of which are down about 27% in 2025, making it the weakest performer of the so-called Magnificent Seven stocks. Tesla shares had rallied in the wake of Trump's reelection, which Musk vigorously supported, but are down almost 40% off their peak in December.
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Much of the stock's recent decline came after the high-profile blowup between Musk and Trump last week. While Musk subsequently suggested he was open to making amends, the tensions are seen as a significant headwind overhanging the shares.
“Looking ahead, we are concerned that the war of words between President Trump and Elon Musk, along with expiration of EV credits, could further weaken demand for new Teslas,” wrote analysts at Argus Research, who downgraded the stock to hold from buy.
The feud, they added, is emblematic of how the stock “appears to be currently trading on non-fundamentals events.” This view was echoed by Baird, which cut the stock to neutral from outperform.
“The recent incident between Musk and President Trump exemplifies key-person risk associated with Musk's political activities,” analyst Ben Kallo wrote. “While we have no indication of how the relationship may change or what either will do, we see the situation as adding uncertainty to TSLA's outlook. Additionally, we believe this may heighten questions regarding brand damage, which we expect will persist until sustained evidence of volume growth avails itself.”
Musk's comments about Tesla's robotaxi program “are a bit too optimistic, and we believe this excitement has been priced into shares,” Baird said. The service, which focuses on driverless vehicles and artificial intelligence, is scheduled to launch in Austin this week.
The two downgrades underline how Tesla is the megacap viewed most skeptically by Wall Street. Fewer than half of the analysts tracked by Bloomberg recommend buying the shares, by far the weakest such ratio among the market's biggest companies.
To be sure, the stock still has 30 buy ratings, compared with 18 hold ratings and 13 analysts who recommend selling. Tesla trades basically in line with the average price target for the stock, suggesting analysts aren't looking for a rebound in shares.
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