Tesla In Big Trouble But Can Still Soar If Elon Musk Does One Thing: Analyst

Tesla is staring down a demand crisis, sliding sales and jittery investors, but one analyst believes the stock could still soar if Elon Musk shifts his focus back to the company.

Speaking on CNBC last month, Daniel Newman, the chief executive officer of Futurum, said Musk is "back in founder mode", but warned that the EV giant faces a "big fall" in earnings and revenue. At the same time, he argued that Tesla's stock still carries exponential upside if Musk does the "right thing".

"The valuation is eye-watering. It's really hard to get behind and it's so much higher than everything else in the Mag 7," Newman said.

"The problem is investors are so scared of another tweet about America's party or him going on the campaign trail again. You have to have that appetite for discomfort and uncertainty," Newman said.

That uncertainty is rooted in Tesla's shrinking market share. In California — the biggest US market for electric vehicles — Tesla's sales fell 12% year-on-year in 2024, pushing its share down to 52.5% from 60.1% in 2023. The slump isn't due to fewer EVs being sold overall. Californians actually bought over 2 million EVs last year, almost double the previous two years combined, underscoring how rivals are rapidly eating into Tesla's lead.

Institutional investors aren't convinced, either. In its Q1 2025 investor letter, the Macquarie Large Cap Growth Fund credited its decision to avoid Tesla stock as a top contributor to returns. "Tesla faced well-publicised headwinds last quarter that may bleed into future periods," the fund wrote. "The business has never met our quality standards and we are happy to sit on the sidelines of this battleground stock."

For Tesla, the road ahead may hinge less on the competition and more on Musk himself, as Newman sees it.