Tesla Stock Slides Pre-Market: Wall Street Predicts Tough 2025 While Retail Rages At Musk’s Politicking

Shares of Tesla, Inc. fell over 3.5% premarket Monday, heading toward a two-week low, as broader market concerns and controversy surrounding CEO Elon Musk weighed on retail sentiment. 

The stock is coming off its worst weekly performance since Jan. 3, adding to investor caution ahead of Tesla’s fourth-quarter (Q4) earnings this Wednesday.

U.S. stock futures tumbled Monday amid fears of a potential artificial intelligence (AI) bubble burst. Reports of Chinese startup DeepSeek developing a competitive AI model at a fraction of typical costs spurred a selloff in tech stocks, with Tesla among the casualties.

Tesla’s upcoming earnings report is expected to be a critical driver for the stock. Analysts forecast adjusted earnings per share (EPS) of $0.76 on revenue of $27.11 billion, with operating profit margins anticipated at 10.5%, up from 8% a year ago. 

However, Tesla has missed earnings and revenue estimates in three of its last four quarters, keeping investors on edge.

Morgan Stanley analyst Adam Jonas in a note highlighted expectations for Tesla’s Q4 gross auto margins (excluding regulatory credits) at around 15%, while the company’s inventory reduction efforts are likely to support free cash flow. 

Key areas of focus include Tesla’s FY24 delivery growth target, the Model Y Juniper ramp, progress on FSD adoption, and updates on initiatives like AI infrastructure expansion and the much-anticipated AI Day event, he added.

Tesla faces a challenging 2025 outlook as U.S. President Donald Trump seeks to dismantle Biden-era climate policies favoring electric vehicles (EVs). 

Analysts expect Tesla’s FY25 volume growth to fall closer to 10%, compared to Musk’s earlier projection of 20–30%, according to a Financial Times report. 

Wall Street’s lowered forecast also reflects rising competition from China, slowing Cybertruck volumes, and a potential rollback of EV tax incentives, the report added.

TSLA sentiment Jan 27 premarket as of 7:45 am ET | source: Stocktwits

On Stocktwits, retail investors have turned more ‘bearish’ on Tesla. 

Sentiment was dampened not only by the market outlook but also by Musk’s polarizing political statements. 

Over the weekend, Musk virtually addressed a rally for Germany’s far-right party, making controversial remarks about moving beyond Germany’s Nazi history, according to CNBC.

The comments, compounded by criticism of a gesture Musk made during a speech in Washington days earlier, have deepened outrage. 

Retail investors accused Musk of damaging Tesla’s brand, with some also predicting a stock crash on the back of poor earnings results.

Tesla remains among the most-followed tickers on Stocktwits, with over 995,000 followers, adding over 20,000 watchers since Trump’s election win on Nov. 5.

It is among the top five most active S&P 500 stocks early Monday, with 2.6 million shares traded premarket. 

Tesla's stock has doubled over the past year, buoyed by optimism over Trump’s presidency and regulatory rollbacks.

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