Tesla Sank Today -- Is the Stock a Buy Right Now?

Key Points

• Tesla stock fell Tuesday in conjunction with multiple bearish catalysts.

• Elon Musk's feud with Trump was a factor in the sell-off, but concerns about vehicle shipments could have been a bigger factor.

• Tesla has plenty of long-term growth opportunities, but its near-term outlook seems challenging.

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Tesla (NASDAQ: TSLA) stock got hit with a substantial valuation pullback in Tuesday's trading. The electric vehicle (EV) leader's share price ended the daily session down 5%. Meanwhile, the S&P 500 (SNPINDEX: ^GSPC) fell 0.1%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) fell 0.8%.

News involving Tesla played a significant role in pushing the broader market lower in Tuesday's trading. After hitting record highs in Monday's session, some investors were likely already poised to take profits -- and another ramp-up in the feud between Elon Musk and President Trump prompted sell-offs for Tesla that had ripple effects for other tech stocks.

Adding another bearish catalyst, the U.S. Senate passed President Trump's tax and budget bill without a provision that would have limited the ability of states to craft their own artificial intelligence (AI) regulations.

With today's pullback, Tesla stock is now down 13% over the last month and roughly 26% across 2025's trading.

Is Tesla stock a buy right now?

While Tesla's robotaxi service has now launched in Austin, Texas, it could take a while for the business to scale substantially. Meanwhile, the core auto business faces the risk of sustained headwinds in the near term.

Worsening relations between Trump and Musk could result in a less favorable growth backdrop for Tesla, but some valuation fundamentals look risky even if the tensions prove to be short-lived. Trading at roughly 10 times this year's expected sales and 161 times expected earnings, the company's valuation has some big wins already priced in, even as vehicle unit sales are seeing significant declines.

Tesla has a strong track record and the foundations for ramping up its robotaxi and autonomous driving units, but a weaker sales outlook for its core EV business makes shares a risky play right now.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Tesla Sank Today -- Is the Stock a Buy Right Now? was originally published by The Motley Fool