Tesla Shares Plunge 14% Amid Oversold Signals and Market Concerns; Analysts Remain Bullish

Technical Analysis

Tesla (TSLA) closed sharply lower on June 5, 2025, dropping 14.26% to $284.70 after hitting an intraday low of $273.42 and a high near $324.55 earlier in the session. The steep daily decline pushed the RSI to 30, entering oversold territory, while volume traded slightly below average at 122.85 million shares. The 50-day moving average ($291.46) and 200-day moving average ($304.71) remain above the current price, indicating downward momentum and a bearish trend in the medium term. Support at $282.76 and resistance at $284.95 form a narrow price band near the last close, suggesting consolidation potential with downside risk if the support breaks. The MACD remains positive but must be monitored for potential bearish crossover following recent price weakness. The ATR of $6.65 signals moderate volatility.

For the next trading day, a technical rebound is plausible given the RSI oversold condition and recent market volatility; however, any rally may face resistance near $285. A sideways to slightly negative bias is expected over the short term unless a catalyst triggers a breakout above the 50-day MA. Over the coming week, consolidation near the current levels is likely, with notable downside risk if support fails amid residual uncertainty.

Fundamental Analysis

Tesla’s market capitalization stands at approximately $966 billion, reflecting substantial market confidence despite recent volatility. The trailing twelve months (TTM) EPS is $1.76, which combined with the high P/E ratio of 170.64, suggests the stock is priced for high growth but carries valuation risks. The discounted cash flow (DCF) intrinsic value estimate at approximately $50.38 starkly contrasts with market pricing, underscoring a significant premium motivated by growth expectations and brand strength rather than current earnings.

Analyst consensus remains bullish with 32 buys, 24 holds, and 14 sells, yielding a “Buy” consensus outlook. Price targets indicate a median of $395 and a consensus target near $366, implying upside potential of 29% from current prices. However, recent political friction between CEO Elon Musk and President Trump has raised concerns about regulatory risk and delivery growth, as flagged by Morgan Stanley and Goldman Sachs. Yet signs of a potential Musk-Trump reconciliation alleviated some investor fears intraday, prompting a 5.5% rebound before market close.

Tesla’s upcoming earnings announcement on July 22, 2025, will be critical in validating growth projections and gauging whether supply chain or political risks have impaired operational performance.

Intrinsic Value and Long-Term Potential

The DCF value of ~$50 presents a conservative view, possibly undervaluing Tesla’s intangible assets, innovation leadership, and future EV market dominance. Long term, Tesla’s brand equity, technological moat in battery and software, and expansion in energy products provide strong growth avenues. However, the steep valuation multiple implies sensitivity to execution risks, regulatory dynamics, and industry competition.

For long-term investors, Tesla remains a high-growth but high-risk equity. The premium over intrinsic value requires continuous delivery on growth milestones and risk mitigation. Volatility linked to CEO controversies and geopolitical factors may induce sharp price swings in the medium term.

Overall Evaluation

Given the significant recent price drop driven largely by extrinsic risk factors, oversold technical signals, and analyst bullish consensus, Tesla currently profiles as a Hold. The stock faces near-term headwinds but retains upside potential per target prices and strong fundamental underpinnings. Convertible risks related to valuation multiples and political uncertainties argue against aggressive accumulation at current levels. Stability around support and clarity from upcoming earnings will determine whether it can regain momentum, thus making it a measured hold for investors balancing risk and reward.