Tesla (TSLA) stock has been a rollercoaster ride following the U.S. presidential election in November 2024. It has cratered from its highs in 2025 as investor optimism about CEO Elon Musk’s government involvement turned into deep pessimism. However, the stock is still above the levels it used to trade at in 2023 and in 2024 before the election. The difference is that revenue growth has turned into revenue decline and profits have cratered.

Despite this, retail investors continue to flock to the stock in record numbers.

Robinhood’s (HOOD) chief brokerage officer notes that many individuals maintain “strong beliefs” about Tesla and view the pullback in shares as a prime opportunity. With Tesla’s recent Q1 earnings being dismal, this retail buying behavior raises an important question: Are these investors making a savvy contrarian bet, or are they catching a potential falling knife?

Retail Investors See Opportunity

The contrast between retail enthusiasm and insider behavior is striking. The fundamentals are as bad as they ever have been, but the buying pressure hasn’t waned and pushed up TSLA stock after earnings instead. You rarely see a stock make such a sharp move to the upside after missing EPS estimates by 34.9% and revenue estimates by 9.34%.

History says that retail investors are often late to price corrections and are prone to mistaking bounces on the way down for long-term reversals. It’s hard to say if that is the case this time around, as the market is primarily being driven by President Donald Trump’s trade policy decisions. However, if you believe in fundamentals, TSLA is unlikely to see a sustained rally.

Wall Street Remains Deeply Divided on Tesla's Valuation and Prospects

The professional analyst community is highly divided on Tesla’s fair value. The mean price target at $298.92 implies 15% upside from here, but price targets vary significantly from $120 to $488.

Stifel maintained a “Buy” rating with a $450 price target on April 24, whereas Wells Fargo downgraded its price target to $120. The stark disagreement shows how difficult it is to value a stock like TSLA as it is detached from fundamentals.

Musk seems to have successfully shifted the dialogue from Tesla’s cratering core business to speculation about Optimus robots and Robotaxis. Tesla said that Robotaxis will launch in June and has doubled down on that timeline.

Should You Buy or Sell?

You should approach Tesla with eyes wide open to the risks. I don’t think that Robotaxis are going to launch anytime soon, at least not in a meaningful way. The initial rollout will include just “10 or 20 vehicles” in Austin, Texas.

Perhaps most concerning are the reports that Musk shut down an internal analysis from Tesla executives showing the Robotaxi business would lose money.

Optimus robots will likely take even longer than FSD to start making a difference. Musk has a history of being overly optimistic with his timelines. In April 2022, Elon Musk said that Optimus would be “production-ready by 2023,” yet three years later, Tesla is still struggling with supply chain issues and has only managed to establish a small pilot production line in Fremont with no robots actually deployed at scale in its factories.

As W. Edwards Deming said, “In God we trust. All others must bring data.” Until Tesla has the data, TSLA stock remains a “Sell” in my book.