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Tesla (TSLA) plunges 6% amid new executive departures, Musk’s cannabis whiff during podcast

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Tesla stock (NASDAQ:TSLA) is down 6% in Friday’s intraday amid reports that the company lost two more executives, with Chief Accounting Officer David H. Morton, Jr. leaving his post after just two months and Chief People Officer Gabrielle Toledano confirming that she would not be coming back from a leave. Today also stands as Tesla VP of Comms Sarah O’Brien’s last official day at the company.

The latest round of executive departures comes after Elon Musk opted to walk away from his initiative to take the company private last month. Tesla noted in a statement to Reuters that Morton opted to depart from the company due to his discomfort with the level of public attention and Tesla’s overall pace of work. Morton is a veteran in the tech sector, serving as the Executive Vice President and Chief Financial Officer of Seagate before starting his employment at Tesla. That said, his experience was probably not a good fit for the electric car maker’s startup culture, which is characterized by its flat organizational structure and its fast pace.

Overall, Morton appears to have parted ways with Tesla amicably, stating that he still believes in the company’s overall mission, as well as its future prospects.

“I want to be clear that I believe strongly in Tesla, its mission, and its future prospects, and I have no disagreements with Tesla’s leadership or its financial reporting,” he said.

Statements from Chief People Officer Gabrielle Toledano have not been reported as of writing.

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Even before the announcement of Morton’s departure, the company’s shares were already seeing a slight decline in Friday’s pre-market trading as reports of Elon Musk’s behavior in a podcast with comedian Joe Rogan emerged. During the 2.5-hr podcast, the two men talked about several topics, from AI to time management to vertical liftoff airplanes and Japanese feudal weapons. At one point, Rogan, who was smoking cannabis, invited Elon Musk to take a puff. Musk did, and the image of the CEO smoking cannabis immediately spread on social media like wildfire.

The latest drop in Tesla’s stock has caused Consumer Edge analyst James Albertine to call for the company to appoint another senior leader to support Elon Musk. Musk has admitted that running an electric car and energy company like Tesla is exhausting, and in an interview with the New York Times last month, Musk stated that anyone who could do a better job can take over for him anytime. Considering the recent stock drop, as well as the apparent effects of Musk’s little cannabis puff to Tesla shareholders, Albertine noted that the time might be right for Tesla’s Board to step in.

“We have been calling for a Co-CEO or COO to assist to codifying the leadership structure and in so doing, the culture at Tesla. We think this is further evidence that the time is now for management and the Board to address these issues,” Albertine said.

The plunge in Tesla’s stock comes just a day after Elon Musk expressed his support for a report estimating the US sales figures for electric cars currently available in the United States. The report, which was published by electric car-themed news site InsideEVs, estimated that the Tesla Model 3, Model S, and Model X, were the Top 3 electric cars in the US in August. A report from auto sales tracking website GoodCarBadCar also listed the Model 3 as the 5th best-selling passenger car in America last month, in a list that included mainstream vehicles like the Toyota Camry, Honda Civic, and the Honda Accord.

As of writing, Tesla stock is down 6.64% at $263.13 per share.

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Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Investor's Corner

Piper Sandler raises Tesla (TSLA) target after China trip, cites robotics leadership

Analysts concluded that Tesla is still the benchmark that competitors rely on for innovation.

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Credit: Tesla Asia/X

Piper Sandler boosted its Tesla (NASDAQ:TSLA) price target to $500 from $400, maintaining an “Overweight” rating after a research trip to China. 

The firm cited Tesla’s leadership in artificial intelligence and robotics as central to its thesis, even as Chinese electric vehicle makers grow more competitive. Analysts concluded that Tesla is still the benchmark that competitors rely on for innovation.

A China visit

During its visit, Piper Sandler met with several Chinese EV manufacturers, many of which are vertically integrated and expanding rapidly. Analysts noted that these “fast followers” represent Tesla’s most significant competitive challenge. However, executives from multiple companies acknowledged Tesla’s foundational role in shaping the industry’s direction, TipRanks stated in a report.

One automaker told Piper Sandler that “without Tesla going from 0 to 1, we can’t go from 1 to 100,” highlighting the Elon Musk-led company’s enduring influence. Analysts said the remarks reflect both admiration and dependence on Tesla’s early innovations, particularly in areas such as battery integration, vehicle software, and AI-powered features.

Tesla’s leadership

Piper Sandler’s report emphasized that while Chinese automakers are formidable in design and production, they look to Tesla for advancements in “real-world” AI applications. Tesla’s focus on autonomous driving and robotics continues to distinguish it from competitors, making the company Piper Sandler’s top investment idea in this space.

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“Building AI-enabled machines requires data, talent, chips, and engineering prowess. Tesla compares favorably vs. the Chinese on all of these fronts,” Piper Sandler analyst Alexander Potter stated in a note. 

Piper Sandler also shared some of its expectations for Tesla this year, stating that it is estimating that the company will delivery ~495k vehicles this third-quarter, possibly attaining a new all-time record. The firm, however, stated that its 2026 outlook for Tesla is shakier, as the EV maker could just hit ~1.9 million units, which could include as many as 350k affordable “Model 2” vehicles.

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Tesla upgraded to Outperform at Baird on ‘physical AI’ outlook

Analyst Ben Kallo also raised Tesla’s price target to $548 from $320.

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Credit: Tesla China

Tesla (NASDAQ:TSLA) received a bullish nod from Baird this week, with the firm upgrading the stock to “Outperform” on expectations that the company is positioned to lead in what it calls the “physical AI” era. 

Analyst Ben Kallo also raised Tesla’s price target to $548 from $320, noting that despite muted quarterly results, shares have gained 24% in the past month, outpacing the S&P 500’s 3% rise.

Long-term milestones

The Baird analyst shared his insights in a note to investors. “Relatively muted stock reactions following a series of less-than-stellar quarters and investor inbounds regarding long-term initiatives lead us to believe focus has increasingly shifted to the future for TSLA. We now expect shares to ‘Outperform’ as TSLA is increasingly viewed as the leader in physical AI,” the analyst wrote in his note.

Kallo also pointed to Tesla’s ambitious roadmap as a key reason for the upgrade, as well as the company’s new proposed compensation plan for CEO Elon Musk. The package ties rewards to ambitious milestones, including the delivery of 20 million vehicles annually, the deployment of 1 million robots and 1 million robotaxis, and 10 million Full Self-Driving (FSD) subscriptions. 

Vehicles, robots, and energy

Baird’s scenario analysis suggested that Tesla could reach a valuation of more than $5.5 trillion by 2035 in its minimum case, with potential upside to $12 trillion and $3,000 per share if milestones are exceeded, as noted in an Investing.com report.

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Beyond Musk’s compensation framework, Baird highlighted multiple near-term catalysts for Tesla. These include potential updates on Optimus, the rollout of more affordable vehicles, new Robotaxi market entries, and an upcoming shareholder vote on Musk’s pay package. Expansion in Tesla’s energy storage and software businesses was also flagged as a growth driver. Kallo also described Tesla as having “lots of irons in the fire,” ranging from the scaling of the Semi to recurring revenue streams tied to software.

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Tesla called ‘biggest meme stock we’ve ever seen’ by Yale associate dean

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Credit: Tesla

Tesla (NASDAQ: TSLA) is being called “the biggest meme stock we’ve ever seen” by Yale School of Management Senior Associate Dean Jeff Sonnenfeld, who made the comments in a recent interview with CNBC.

Sonnenfeld’s comments echo those of many of the company’s skeptics, who argue that its price-to-earnings ratio is far too high when compared to other companies also in the tech industry. Tesla is often compared to companies like Apple, Nvidia, and Microsoft when these types of discussions come up.

Fundamentally, yes, Tesla does trade at a P/E level that is significantly above that of any comparable company.

However, it is worth mentioning that Tesla is not traded like a typical company, either.

Here’s what Sonnenfeld said regarding Tesla:

“This is the biggest meme stock we’ve ever seen. Even at its peak, Amazon was nowhere near this level. The PE on this, well above 200, is just crazy. When you’ve got stocks like Nvidia, the price-earnings ratio is around 25 or 30, and Apple is maybe 35 or 36, Microsoft around the same. I mean, this is way out of line to be at a 220 PE. It’s crazy, and they’ve, I think, put a little too much emphasis on the magic wand of Musk.”

Many analysts have admitted in the past that they believe Tesla is an untraditional stock in the sense that many analysts trade it based on narrative and not fundamentals. Ryan Brinkman of J.P. Morgan once said:

“Tesla shares continue to strike us as having become completely divorced from the fundamentals.”

Dan Nathan, another notorious skeptic of Tesla shares, recently turned bullish on the stock because of “technicals and sentiment.” He said just last week:

“I think from a trading perspective, it looks very interesting.”

Nathan said Tesla shares show signs of strength moving forward, including holding its 200-day moving average and holding against current resistance levels.

Sonnenfeld’s synopsis of Tesla shares points out that there might be “a little too much emphasis on the magic wand of Musk.”

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

This could refer to different things: perhaps his recent $1 billion stock buy, which sent the stock skyrocketing, or the fact that many Tesla investors are fans and owners who do not buy and sell on numbers, but rather on news that Musk might report himself.

Tesla is trading around $423.76 at the time of publication, as of 3:25 p.m. on the East Coast.

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