Tesla (TSLA) Stock Pop Analysis: Melius 'Must Own' Claim vs. Bearish Sentiment

Tesla (TSLA) stock experienced a short-term pop on the event date due to Melius Research’s ‘must own’ recommendation citing Full Self-Driving (FSD) progress and AI chip advancements. This event was discussed on Reddit, where users raised bearish concerns including FSD overhype relative to Waymo, unmet promises (Optimus robots, robotaxi scaling), algorithmic pumping suspicions, and repetitive positive narratives. Market data shows TSLA closed at $417.78 (event day, +3.88%) with volume 96.81M shares (higher than adjacent days). Financial metrics include a $1.37T market cap, 259x P/E ratio, 5.55% net margin, and 6.97% ROE—indicating valuation and profitability concerns. Analyst consensus is split: 38.8% Buy, 40% Hold, 21.2% Sell, with an average target price of $455 (+6.7% upside). [0]

• The stock pop reflects short-term market optimism on FSD/AI chips, but long-term skepticism persists due to unfulfilled promises and high valuation.
• Reddit sentiment and analyst split reveal a disconnect between short-term price movement and underlying risks.
• Execution risks (robotaxi scaling below targets) and legal risks (Powerwall class action) add uncertainty despite the pop.

• Valuation Risk
  : 259x P/E ratio suggests overpricing relative to financial performance.
• Execution Risk
  : Robotaxi deployment delays (Austin numbers below targets).
• Legal Risk
  : Powerwall class action lawsuit could impact brand and finances.
• Competition Risk
  : Waymo’s lead in FSD deployment may erode market share.

• FSD adoption from North American free trials.
• AI chip advancements driving long-term revenue.
• Regulatory approvals for FSD in new regions.

Q4 earnings report will be critical to verify revenue trends and address bearish claims.

• Price
  : Event day close $417.78 (+3.88%), current price $426.58 (+1.71%).
• Valuation
  : Market cap $1.37T, P/E ratio 259x.
• Sentiment
  : Mixed (short-term pop vs. bearish Reddit comments and analyst split).
• Monitoring Factors
  : FSD adoption rates, Q4 earnings, robotaxi scaling, regulatory approvals.

[0] Internal Market News Analysis Report