Barclays: Tesla will be even more “disconnected from fundamentals” in 2025

Tesla has long been known as a company whose stock price isn’t always closely tied to its underlying financial performance. Rather, it trades on things like vibes, unsubstantiated political optimism, and the lure of products not yet realized. This year things might get even more detached. In a research note from Barclays today, analysts wrote that Tesla’s stock could get “increasingly disconnected from fundamentals.”

“We believe fundamentals remain secondary vs. the broader theme of narrative command for Tesla, which has gone into hyperdrive since the US Elections last November. The stock has become untethered from fundamentals, arguably similar to what we saw with Tesla stock in late 2021 when the market was awash in EV euphoria. Yet it’s important to note this move has very little to do with EVs, as the Election catalyst is objectively a negative for EVs.

Rather, the AV/AI opportunity has drawn excitement over the large TAM opportunity ahead, with reinvigorated hopes of Tesla’s role as a disruptor — regardless of how distant the opportunity is, or how difficult it will be to monetize (a point we’ve discussed in the past). Yet beyond this is the ‘Elon premium’ in the stock, which we believe is at an all-time high, especially with Elon Musk’s stature solidifying post the US election. With Tesla reinforcing itself as the ‘OG meme stonk,’ we think Tesla’s best comp is perhaps Bitcoin, and Elon’s star power seems core to that.”

Barclays maintained its neutral rating but raised its price target from $270 to $325.