Analysts cite Q1 earnings growth and AI-driven catalysts but warn of insider selling and merger uncertainty weighing on TSLA.
Tesla (NASDAQ:TSLA) stock closed at $418.45, 20% below a $500 target, after Q1 operating income surged 136% year-over-year on modest revenue growth. Automotive gross margins rebounded to 21.1%, FSD subscriptions rose 51% to 1.28 million, and free cash flow doubled to $1.444 billion.
Shares remain volatile, down 6.95% year-to-date and 5.35% in the past week, despite a 7.47% monthly rally. Prediction markets assign only 17% odds to TSLA hitting $495 by June, citing SpaceX merger speculation and 43 recent insider sales. Energy revenue fell 12% YoY, and inventory rose to 27 days of supply.
Investors weigh AI-driven growth against macro risks, with Tesla’s beta of 1.79 amplifying market swings. A potential SpaceX merger is seen as unlikely to boost profitability near-term.