Tesla (NASDAQ: TSLA) saw a significant share price decline of 5% on Tuesday, contributing to its overall drop of 13% over the last month and 26% since the start of 2025. This downturn coincided with broader market trends, as the S&P 500 fell 0.1% and the Nasdaq Composite dropped 0.8%.
The stock’s decline was influenced by profit-taking after reaching record highs and escalating tensions between Elon Musk and former President Trump. Additionally, the U.S. Senate passed a tax and budget bill without limiting states’ abilities to regulate artificial intelligence, which added to investor concerns.
Tesla’s valuation is currently at approximately 10 times this year’s expected sales and 161 times anticipated earnings, with reports indicating a weakening sales outlook for its core electric vehicle business.
