Why a Wall Street Analyst Warns Tesla Shares Could Drop 60%

Analysts say Tesla’s rising stock is out of sync with weakening sales, shrinking profits, and record-high inventory levels.

BY LEILA SHERIDAN, NEWS WRITER

Tesla’s stock has surged in recent years, but some analysts say that rally may be obscuring deeper cracks in the business.

JPMorgan is urging investors to approach the stock with a “high degree of caution,” warning it could fall as much as 60 percent from current levels, according to MarketWatch.

The concern is a growing disconnect: while Tesla’s share price has climbed, expectations for its core business have steadily declined. JPMorgan analyst Ryan Brinkman pointed out that Wall Street’s outlook looked far more optimistic just a few years ago. Forecasts for Tesla’s first-quarter deliveries peaked in mid-2022 but have since been revised downward, even as the stock has risen more than 50 percent over that same period.

The shift is even more stark when it comes to profitability. Brinkman expects Tesla to report earnings of about 30 cents per share for the first quarter, a sharp drop from earlier projections that once reached as high as $3.68, according to MarketWatch. That multiyear slide in estimates, he argued, “does not instill confidence in the company’s ability to achieve lofty out-year objectives.”

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Tesla shares are currently trading around $359, down about 20 percent so far in 2026. The stock peaked just under $499 last December, fueled in part by excitement around its robotaxi ambitions, according to Yahoo Finance.

Now, Tesla is trying to keep investors focused on what comes next.

CEO Elon Musk has framed 2026 as a pivotal year. The company plans to begin production of a dedicated robotaxi vehicle this month, roll out a humanoid robot later this year, and expand its ride-hailing service from two U.S. cities to nine by June, according to MarketWatch.

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