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Investor's Corner

Tesla price targets drop for varying reasons, but some feel like a reach

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Tesla (NASDAQ: TSLA) price targets were dropped by several firms due to varying reasons, but some feel like a reach.

It is no secret Tesla stock has been beaten and battered so far this year. As of February 6, shares are down over 25 percent, and the slide truly started to get intense after the company’s Q4 Earnings Call.

While some analysts called the call “a trainwreck,” others’ focuses were on a wide variety of issues. Some of them that were spoken of were Tesla’s lack of annual guidance, no narrative on price cuts, and a general lack of strategy.

Shares felt the pressure shortly after the call, but firms are still trying to grasp their outlook for the stock as Tesla will navigate what it calls the middle of “two growth waves” as it prepares to launch the next-gen platform sometime in 2025.

Piper Sandler Blames ‘Aging Product Lineup’

Piper Sandler’s Alexander Potter said in a note to investors that more price cuts are likely to take place across Tesla’s vehicles in the future because of an “aging product lineup.”

Earlier in this article, I discussed some reasons for price target downgrades feeling like a reach. This is one of them.

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Tesla has done things differently than a lot of traditional car companies, but when you think about its models, there are a few things that the automaker does in a similar fashion.

A lot of OEMs keep the same nameplates on cars for years, updating the looks and tech to offer what feels like a “new” product and encourage buyers to purchase an “updated” version. The Civic, for example, is just one of many vehicles to be developed in “generations,” and every few years, it gets a new look and some new features.

Tesla is doing that with the Model 3 with the release of the “Highland,” if that is what it can be referred to as. The Model S and Model X were updated just a few years ago, and the Model Y is currently in the process of an update as well, according to reports.

Tesla also just launched the Cybertruck in November, and it has started deliveries.

It is tough to say that it feels like Tesla’s product lineup is “aging,” at least from my perspective, because:

  • The vehicles constantly get better and change through software updates
  • Three of the four vehicles in Tesla’s lineup that have been around for more than a year have either been updated or are relatively new. The Model S and Model X were updated in 2021, the Model 3 in late 2023, and the Model Y is only a few years old.

Price cuts from Tesla are more than likely not a result of an “aging product,” but likely to find a sweet spot for demand triggers.

Musk said last year that prices truly depend on market conditions and that the company thinks it “makes sense to sacrifice margins in favor of making more vehicles.”

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Tesla CEO Elon Musk says risky margin sacrifice ‘makes sense’ to up production

Price cuts seem to be more focused on getting cars out of the door and less on incentivizing people to buy an aging product.

Potter trimmed his price target to $225 from $295.

Daiwa Worries About Tesla Governance

Daiwa Securities downgraded Tesla stock to Neutral from Outperform and trimmed its price target to $195 from $245.

Analysts at the firm state that Tesla’s increasing focus on governance concerns could limit the company’s propensity to invest in the long term and could hinder innovation. It did state that long-term investors could be rewarded, but they should be prepared for increased volatility.

Most of the governance issues stem from Musk losing his compensation package after a Delaware Chancery Court Judge ruled it was unfair to Tesla investors, despite the pay package being approved by those shareholders several years ago.

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Vivek Ramaswamy calls Elon Musk’s Tesla pay package situation ‘a threat to capitalism’

As a result of the decision, Tesla has hinted it could ditch Delaware for its state of incorporation and head to Texas instead, where its headquarters is located.

Tesla shares are up 1.23 percent today as of 11:40 a.m. on the East Coast.

Disclosure: I own Tesla stock.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Elon Musk

Elon Musk will give ‘every kid in America’ a SpaceX share in 2027

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Credit: Grok Imagine

Elon Musk said he is planning to give “every one of his SpaceX shares to every kid in America” in 2027, stating that “this will be the first of many.”

SpaceX went public earlier this year, and its stock price has been relatively stable since leveling off shortly after its IPO. Based on its current price, it’s a gift of just over $10 billion to children across the United States.

It appears to be closely related to President Donald Trump’s bank accounts for children, which were set up earlier this year as Trump Accounts.

Just hours earlier, Anthropic had announced the establishment of its Anthropic Public Benefit Fund, “a new wholly-owned entity dedicated entirely to public benefit.” Musk responded by stating he recommended “giving the shares directly to the public,” and that he would be doing it that way.

Just a little bit later, Musk said children across the U.S. would be getting a share from him:

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There are roughly 70 million children, meaning someone under the age of 18, in the United States, according to the Federal Interagency Forum on Child and Family Statistics. Musk’s ownership of SpaceX stock shows he has around 849 million Class A shares of SpaceX stock, according to filings with the SEC.

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Investor's Corner

SpaceX’s biggest earnings test yet lands Tuesday, and Tesla shareholders should be watching

SpaceX reports earnings Tuesday as Wall Street watches AI spending, Starlink growth and Tesla merger

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SpaceX reports third quarter results after the market closes Tuesday, with a webcast at 4:30 p.m. ET streamed on X, and Tesla follows a day later. Bloomberg consensus, cited by Pepperstone, calls for revenue of $12.89 billion, adjusted EBITDA of $6.62 billion and adjusted EPS near $0.15. That would be about 65% growth from the second quarter and SpaceX’s first profitable quarter since its IPO. Analysts expect roughly $6.4 billion from AI and $4.9 billion from Starlink, which is projected to reach 14.3 million consumer subscribers. Capital spending is forecast at $19.6 billion, leaving free cash flow near negative $11.6 billion.

The numbers matter because SpaceX has spent months trying to win over a skeptical market. It priced its record IPO at $135, spiked to $225.64, then sank near $105 in early August. Friday’s close of $146.03 sits about 28% below the June high. The Q2 report beat on revenue at $7.8 billion and put Starlink at 12 million subscribers, but $18.4 billion of capex hurt the stock. Since then SpaceX reached orbit on Starship Flight 14 with 26 Starlink V3 satellites, agreed to buy 800 MHz spectrum for about $8 billion as part of its Starlink Mobile push, and signed a fourth compute hosting deal in four months worth roughly $13 billion a year from December. Management is targeting more than 2 gigawatts of compute by year end and a $100 billion annualized revenue run rate. Evercore ISI, which raised its target to $275, said the quarter may be judged more on those targets than the reported figures

All of this sits under the Tesla merger question. Barclays analyst Dan Levy expects an all stock deal in which SpaceX buys Tesla at a premium, using reference values of $2.1 trillion and $1.5 trillion, and said an announcement would need to come by late October or early November to be voted on at Tesla’s December 6 annual meeting. Barclays estimates Musk would hold about 37% of the combined company and 56% of the votes. Musk said in July that combining companies cannot be discussed on an earnings call, but an investor question asking when SpaceX will merge with Tesla is sitting on SpaceX’s Q&A platform, and Teslarati has tracked how the Roadster demo revived the talk.

If a deal happens, Tuesday’s result would effectively set the price Tesla holders would receive. Their shares would convert into SpaceX stock, along with exposure to a company with a heavy investment on AI, while Tesla itself expects 2026 capex above $25 billion. A strong quarter and calmer spending would make that exchange easier to sell. Another round of heavy capex and a falling stock would make it harder.

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Investor's Corner

Tesla’s flying Roadster just revealed something bigger than the car

Analysts say the Roadster demo puts a Tesla and SpaceX merger back on the table.

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Tesla’s new Roadster, upside down and trailing cold gas thruster smoke, flips over a lineup of Tesla vehicles at the Roadster unveiling near Waco, Texas on October 15, 2026. (Image: Tesla)
Tesla’s new Roadster, upside down and trailing cold gas thruster smoke, flips over a lineup of Tesla vehicles at the Roadster unveiling near Waco, Texas on October 15, 2026. (Image: Tesla)

The Roadster unveiling near Waco ended Thursday night, and by Friday morning much of the investor reaction had less to do with the car than with who owns the rocket technology inside it.

Wedbush analyst Dan Ives said the event “puts the Tesla/SpaceX relationship on the table in a tangible way,” pointing to the propulsion, pressure vessel and control hardware sitting on a Tesla product. Gene Munster of Deepwater Asset Management called the demo “a ridiculous display of engineering” with “no commercial value” beyond embarrassing traditional automakers, though he said it showed Musk wants the two companies together.

The more specific forecast came a day earlier from Barclays. Analyst Dan Levy told clients a deal could be announced before Tesla’s annual meeting, which must happen by December 6, and that an announcement in late October or early November could make shareholder approval harder. Barclays expects SpaceX to be the buyer in an all stock deal, with Tesla holders receiving SpaceX shares at a premium, based on market values of roughly $2.1 trillion for SpaceX and $1.5 trillion for Tesla. If nothing lands around the meeting, the bank still sees an announcement within 6 to 12 months.

The Roadster demo just added more weight to merger speculations. Tesla’s demo used cold gas thrusters and pressure tanks of the kind SpaceX uses on Falcon 9, and Musk described the car as a collaboration between Tesla and SpaceX engineers, as we mentioned in our breakdown of the three Roadster configurations.


Musk has not publicly addressed a deal since the event, as far as we have seen. His most direct answer remains the one he gave at the All In Summit, when he said that with so much collaboration, “who can imagine what action one might take” without ruling anything out. Ives has held to a 2027 timeline since his March note, and Musk pushed back on the China piece of the speculation when ARK floated a year end announcement in August.

The next test is Tesla’s third quarter earnings call on October 21. However, we recall in July that Musk told analysts, “we can’t talk about combining companies and that kind of thing on an earnings call,” so a clear answer wouldn’t be expected.

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