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Despite the many brickbats, Tesla share prices are still defying gravity. On Tuesday, JPMorgan warned the stock could lose more than 60% of its value due to its faltering performance. However, shares rallied nearly 5% Wednesday after second-quarter delivery numbers weren’t as bad as expected. For the seasoned investor, Tesla is now a familiar pattern: disappointing results, warnings from analysts, but an immediate stock rebound driven by unwavering faith in Elon Musk’s promises.

JPMorgan Slashes Forecasts, Warns of Sharp Downside

JPMorgan analyst Ryan Brinkman cut his 12‑month price target for Tesla to $115 per share, implying a massive 62% downside. The warning follows another disappointing quarter for Tesla’s core business: deliveries fell 13% in Q1 and declined 13.5% in Q2, production slowed, and overall revenue has been propped up by regulatory credit sales rather than car profits.

Brinkman lowered his Q2 EPS forecast to $0.42, down from $0.48, and trimmed his full-year estimate to $1.75, below the Street’s $1.87 consensus. Investors will watch the July 23 earnings report for signs of a turnaround, but headwinds—cooled EV demand, growing competition from Chinese automakers and legacy brands, and fading federal subsidies—remain steep.

Tesla Share Prices Stay High on Optimism, Not Fundamentals

Despite weak sales and cautious forecasts, Tesla’s stock continues to trade near $310, valuing the company at almost $1 trillion. Yet fundamental models assign Tesla’s auto business a fair value of just $50–$100 per share. The gap exists because many investors aren’t betting on current performance but on Musk’s future breakthroughs—robotaxis, humanoid robots, and other speculative ventures.

Musk has promised a fleet of autonomous Cybercabs by 2026 and introduced Optimus robots for solar‑powered towns—but these projects are largely aspirational. Tesla’s only live robotaxi program is a small pilot in Austin, Texas, where performance lags far behind competitors like Waymo.

Investor Faith Faces a Harsh Reality Check

Musk’s bold visions have cultivated a devoted investor base that views Tesla as more than an automaker—a centerpiece of a grand clean‑energy and AI future. Critics warn this “cult‑like” loyalty props up the share price despite disappointing quarterly results.

After reporting 384,122 Q2 deliveries—down from 444,000 last year but above feared lows—Tesla shares jumped 4.8%. The market rewarded what it saw as “less bad” results, rather than strong fundamentals.

Can Reality Catch Up to Tesla Share Prices?

The disconnect between Tesla’s lofty valuation and its operational metrics is becoming harder to ignore. Profits plunged 71% in Q1, and no affordable new model is on the horizon—Musk scrapped the planned $25,000 EV as “pointless.” Instead, Tesla focuses on high‑end offerings and speculative tech. Leadership churn adds to the uncertainty, with key executives departing this year.

Regulatory risks also loom large: President Trump has threatened to unleash the Department of Government Enforcement (DOGE) on Tesla and even floated deporting Musk if he continues criticizing the GOP. Such political entanglements could spook investors and undermine Tesla’s stock performance.

Global economic headwinds, subsidy rollbacks, and intensifying competition pose further challenges. Yet as long as Musk can weave compelling narratives, Tesla shares may remain buoyant.

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