Tesla (TSLA) CEO Elon Musk has found himself in hot water with British bank Barclays, who have issued a warning that he has created a “code red situation” for the automaker through his involvement with the Trump administration. As a result, the bank has slashed its price target on TSLA to $275 from $325, while maintaining an Equal Weight rating on the stock.
Barclays believes that Musk’s actions, including his participation in DOGE and the company’s deteriorating fundamentals, are hindering Tesla’s ability to sell more cars in 2025 than it did in 2024. However, the bank suggests that Musk could potentially turn things around by discussing the launch of Tesla’s robotaxis during the upcoming earnings call scheduled for tomorrow.
Meanwhile, well-known analyst Dan Ives from investment bank Wedbush has offered his advice to Musk. Ives recommends that the CEO resign from the Trump administration and provide concrete details and a timeline for the robotaxi launch and other robotics initiatives. He warns that there may be permanent brand damage if Musk does not step down from his government role, but believes that the long-term story of the company will remain intact.
Ives also cautions against Musk’s continued involvement with DOGE, stating that it could further damage Tesla’s brand. He emphasizes the importance of focusing on the company’s core business and technology initiatives to drive future growth.
While Tesla holds potential, Ives suggests that AI stocks may offer greater promise for higher returns in a shorter timeframe. He points to a specific AI stock that has shown significant growth since the beginning of 2025, outperforming popular AI stocks that have experienced declines. For investors seeking a promising AI stock trading at a low multiple of its earnings, Ives recommends checking out a report on the “cheapest AI stock.”
In conclusion, the future of Tesla may hinge on Musk’s ability to navigate the challenges posed by his involvement in the Trump administration and focus on driving innovation and growth within the company. Investors should consider the advice of experts like Ives and evaluate the potential of AI stocks as an alternative investment opportunity.
