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Asolica > Blog > Finance > Financial institution of America sounds alarm on Tesla’s drawback
Finance

Financial institution of America sounds alarm on Tesla’s drawback

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Last updated: November 3, 2025 12:09 am
Admin
5 days ago
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Financial institution of America sounds alarm on Tesla’s drawback
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Do you need to see a flying automobile? 

Contents
  • Tesla’s Q3: Earnings fell quick, regardless of file gross sales
  • Financial institution of America warns of Tesla’s valuation
  • Cathie Wooden says Tesla’s inventory may hit $2,600

Tesla (TSLA) might quickly present one.

Tesla CEO Elon Musk lately hinted that the corporate may unveil a flying automobile earlier than the top of 2025, in response to The Info.

Musk mentioned on “The Joe Rogan Experience” podcast that the corporate was near demonstrating a prototype, however declined to supply any particulars.

“Whether it’s good or bad, it will be unforgettable,” Musk mentioned. “My friend Peter Thiel, you know, once reflected that the future was supposed to have flying cars, but we don’t have flying cars.”

With Tesla pushing bold new tasks, the inventory value has been rising as properly. The inventory is up 13% 12 months to this point and is buying and selling near its file excessive, closing at $465.56 on Oct. 31.

Tesla has one of many largest retail investor bases out there. Lots of these are actually asking the identical query: How a lot room does the inventory have left to develop?


Tesla inventory is up 13% 12 months to this point.

GETTY

Tesla’s Q3: Earnings fell quick, regardless of file gross sales

Tesla reported file third-quarter income of $28.1 billion on Oct. 22, which beat Wall Road estimates. This was pushed by rising EV gross sales as U.S. patrons rushed to say a tax credit score forward of its September expiration. 

Regardless of the income increase, Tesla’s web revenue fell to about $1.4 billion, a decline of 37% from a 12 months earlier, underneath strain from greater tariffs, analysis prices, and a drop in regulatory credit score revenue. 

Associated: Elon Musk’s prime 3 surprising quotes from Telsa Q3 earnings name

Free money circulation, nevertheless, soared to almost $4 billion, a file for the corporate.

That provides Tesla way more flexibility to fund development areas equivalent to AI, robotics, and autonomous mobility.

Financial institution of America warns of Tesla’s valuation

On Oct. 29, Financial institution of America analysts Federico Merendi and William Healey raised the agency’s value goal for Tesla to $471 from $341. 

“Our revision is driven by a lower cost of equity capital, better Robotaxi progress, and a higher valuation for Optimus to account for the potential entrance into international markets,” the analysts wrote in a analysis observe.

Nonetheless, the analyst warns that whereas Tesla stays a frontrunner in autonomous driving and bodily AI, the valuation is “stretched.”

“There are challenges in the near term and the current valuation is stretched. Therefore, we reiterate our neutral rating,” the analysts wrote.

Within the close to time period, Financial institution of America mentioned Tesla will face challenges within the auto phase in North America, provided that IRA incentives have expired. This aligns with Musk’s July feedback within the second quarter of 2025: “We probably could have a few rough quarters.” 

However the analysts nonetheless consider that Tesla’s vitality and Robotaxi segments are “promising.”

Cathie Wooden says Tesla’s inventory may hit $2,600

Ark Funding’s Cathie Wooden has been considered one of Tesla’s most vocal believers for almost a decade. Her agency first purchased Tesla shares in 2016 and continued including by years of volatility.

In March 2025, Wooden predicted Tesla’s inventory would attain $2,600 in 5 years, which is greater than 5 instances greater than the place it trades now.

Associated: Cathie Wooden bought $21.4 million of surging AI shares

“If I could only invest in one stock, it would be Tesla,” Wooden mentioned in a podcast “The Diary Of A CEO” in June.

“Because, think about it. It is a convergence among three of our major platforms. So, robots, energy storage, AI,” Wooden mentioned.

“And it’s not stopping with robotaxis, there’s a story beyond that with humanoid robots, and our $2,600 number has nothing for humanoid robots,” she added.

Tesla has lengthy been Wooden’s prime holding, now accounting for 12.3% of the flagship Ark Innovation ETF (ARKK).

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