Gerber Kawasaki's CEO, Ross Gerber, forecasts a significant downturn for Tesla (TSLA, Financial), suggesting its stock price could plunge to around $200 by year-end, marking a 36% decrease from a recent $314 close. Though Tesla's stock has recovered from lows, it's still down 17% this year.
Gerber, previously a supporter of Elon Musk, has reduced his Tesla holdings. He cites the July 4th enactment of the "Big and Beautiful Act" by Trump as a potential negative for Tesla. The act ends government support for electric vehicles, including a $7,500 tax credit set to expire. This loss of incentives is seen as a major setback for Tesla.
Additionally, Gerber is skeptical about Tesla's much-anticipated robotaxi service, highlighting Waymo's advantage in LIDAR and digital mapping. He argues that no company currently has a truly stable fully-autonomous driving software.
Tesla's valuation appears overstated, with its P/E ratio nearing 170, significantly higher than Nvidia's (NVDA) 54. Gerber believes a fair value for Tesla should align with other tech giants, estimating it closer to $150, excluding autonomous and robotics valuations.
