TSLA Inc.

NASDAQ
Back to all articles
TSLA Inc. stock analysis TSLA overview
Somewhat Bearish -25

Why Tesla stock is crashing around 3% on Monday

📉 Tesla shares fell over 3% on Monday to $365.12, underperforming broader market indices.

📊 The stock has declined 6.1% over the past week despite reporting better-than-expected bottom-line profits.

🧠 Investor anxiety is primarily driven by slower-than-anticipated rollout timelines for the robotaxi service and AI ambitions.

📉 Tesla stock is currently down 16% year-to-date, though it remains up 32% over the last 12 months.

⚖️ A major volatility catalyst is Elon Musk's SEC filing to register 304 million shares from his 2018 compensation award.

🏛️ The original compensation package faced legal challenges but was upheld by the Delaware Supreme Court in 2025.

💰 Tesla has exceeded its $650 billion valuation target, currently valued at approximately $1.7 trillion on a fully diluted basis.

🔄 Shares are expected to become freely tradable once options expire and are exercised in early 2028.

💸 Historical precedent shows Musk selling shares after exercising options to cover tax liabilities, creating stock volatility.

🤖 Core investor focus has shifted from financial results to execution risks regarding AI development and autonomous driving.

🔋 Tesla's automotive segment faces headwinds following the expiration of the federal $7,500 electric vehicle tax credit.

🎯 The robotaxi service rollout remains a critical focal point for investors seeking scalable business model evidence.

💬 Analysts suggest buying on dips near earnings or waiting for autonomy metrics to confirm AI progress potential.

📉 Conversely, shorts may utilize put spreads capitalizing on elevated implied volatility due to headline risks and option exercises.

⚠️ Key risk for buyers is continued slippage in robotaxi milestones preventing credible revenue deployment forecasts.

🚀 Stock re-rating could occur rapidly if Tesla demonstrates significant progress in autonomy or AI-related metrics soon.

Bullish Signals
  • The article suggests buying Tesla (TSLA) after the post-earnings selloff because the drop is driven by timeline anxiety around robotaxi and AI rather than a collapse in profitability.
  • Tesla's stock remains up 32% over the past 12 months, indicating sustained investor confidence despite year-to-date declines of 16%.
  • To qualify for the compensation, Tesla needed to achieve a valuation of $650 billion—a target it has significantly exceeded, with the company now valued at approximately $1.7 trillion on a fully diluted basis.
  • The Delaware Supreme Court upheld Elon Musk's 2018 compensation award in 2025, preserving his options despite legal challenges.
Risk Factors
  • Tesla shares fell more than 3% to $365.12 on Monday, significantly underperforming the broader market which was down only fractionally.
  • The stock declined 6.1% over the past week despite reporting better-than-expected bottom-line profits, indicating investor skepticism driven by non-fundamental factors.
  • Tesla shares are down 16% year-to-date and face timeline anxiety around robotaxi and AI development which may persist even if profitability remains strong.
  • Robotaxi/autonomy progress keeps slipping with no credible near-term revenue or deployment milestones shown, undermining a core long-term growth narrative.
  • Tesla is facing reduced demand from the expiration of the federal $7,500 tax credit, adding pressure on its core automotive segment profitability.
  • A registration for approximately 304 million shares tied to Elon Musk's compensation award introduces volatility risk due to potential future stock sales upon option exercises in early 2028.
  • Historical precedents show that when Musk exercises options, partial stock sales occur to cover tax liabilities, contributing to stock price volatility as seen in 2021.
  • Progress in artificial intelligence and autonomous driving is slower than expected, raising questions about the timeline for generating meaningful revenue from these strategic initiatives.
Full Analysis
Tesla shares fell more than 3% on Monday to close at $365.12, underperforming the broader market which saw the S&P 500 and Dow Jones Industrial Average decline marginally by 0.1% and 0.2%, respectively. This drop follows a 6.1% decline over the past week, even as the company reported better-than-expected bottom-line profits in its recent earnings report. The stock is currently down 16% year-to-date but remains up 32% over the past 12 months, indicating that recent price pressure is largely driven by investor sentiment rather than a fundamental collapse in profitability. The primary catalyst for the selloff is investor anxiety regarding the timeline and progress of Tesla's artificial intelligence initiatives, specifically the rollout of its robotaxi service which remains central to the company's long-term growth narrative. Progress has been slower than anticipated, leading to questions about when Tesla can generate meaningful revenue from these AI-driven endeavors. Additionally, the expiration of the federal $7,500 tax credit is contributing to reduced demand across the electric vehicle sector, adding pressure on Tesla's core automotive segment and highlighting a tension between resilient current financial results and long-term growth expectations. Compounding the volatility is a significant regulatory filing with the US Securities and Exchange Commission registering approximately 304 million shares tied to Chief Executive Officer Elon Musk's 2018 compensation award. Although this registration does not indicate an immediate sale, it allows shares to become freely tradable once options are exercised, which are set to expire in early 2028. The original compensation package was legally challenged after a Delaware judge voided the award in 2024 but was subsequently upheld by the Delaware Supreme Court in 2025. Historically, such exercises have required partial stock sales to cover tax liabilities, as seen when Musk sold shares in 2021, creating concerns about potential future selling pressure even though Tesla currently stands at a valuation of approximately $1.7 trillion on a fully diluted basis, well above the $650 billion target required for the award.