TSLA experiences a 0.98% decline in stock prices, as the broader market undergoes pressure amid escalating geopolitical risks. The conflict in the Middle East has caused a surge in oil prices, signaling a near-term energy crisis, along with potential semiconductor export restrictions from China, which could further hinder Tesla’s production and sales targets.
As TSLA currently sits at $398.68 per share, investors remain cautious as the market’s future remains highly unpredictable.
Tesla Spends More Than Its Profits
Tesla’s latest update involves a $20 billion plan to build factories for its Cybercab robotaxi and its Optimus humanoid robot. The money is also set aside for new computer clusters needed to train its AI. Safety testing and production schedules for Tesla’s Cybercab are clashing with the allocation of factory space for robot manufacturing, inherently slowing down production and sales.
With falling car sales and spending double its net income, TSLA’s current dip marks a big change from its profit trends of recent years.
Oil Crisis Worsens TSLA Volatility
Tension at the Strait of Hormuz, as Iran closes it off amid the conflict with the U.S.-Israeli forces, has spiked oil prices to a historic high of $100 per barrel. The Strait is a strategic passageway, crucial to the daily transport of 20% of the world’s oil reserves. Even one day of hindered traffic at the strait could affect the global markets drastically.
In the wake of an impending economic crisis like this, growth stocks like TSLA generally take a severe hit, as anxious investors seek safe-haven assets in its place.
U.S. military forces are on the frontline to ensure the shipping lanes stay open. The upcoming G7 meeting shall decide on a possible way to tackle the situation.
Impact of the China-Nexperia Dispute
The long-standing dispute between Dutch chipmaker Nexperia and its Chinese owners has impacted Tesla’s availability of semiconductor chips, crucial for both cars and electronic equipment.
A potential shortage of semiconductor chips sourced from China could affect Tesla sales, as production capacity will not keep up with growing customer demand. This could hinder Tesla’s production targets and market share acquisition.
Should You Buy TSLA?
According to Wall Street, TSLA stock has a Hold consensus rating based on 13 Buys, 11 Holds, and seven Sells issued over the last three months. Major banks like JPMorgan and Morgan Stanley observe that with Tesla’s current momentum, it would be highly unlikely for the company to achieve its targets.
Persistently high oil prices may catalyze EV adoption in the long term, making investments in the sector increasingly fruitful. Tesla’s 2026 updates include the upcoming V3 of the Optimus robot and production of the fully autonomous Cybercab starting from April, both of which could also serve as a potential trigger for a trend reversal.
In the short term, the ongoing Iranian conflict will weigh on Tesla stock. Therefore, patient holders are advised to be cautious of potential macro headwinds.
