Analyst Says He’s Turned Bullish on Tesla (TSLA) Despite Weak Auto Business – Here’s Why

We recently published Analysts Are Talking About These 10 Stocks as AI Investments Continue to Grow. Tesla Inc (NASDAQ:TSLA) is one of the stocks analysts were recently talking about.

CNBC ‘Fast Money’ trader Dan Nathan said in a recent program that he’s turned bullish on Tesla Inc (NASDAQ:TSLA) despite overall weak sentiment and the company’s auto business showing soft trends. Here is why he thinks the stock can rally:

“The bulls and the bears agree that the EV business is bad. I think the consensus for Q3 deliveries is probably low. I think there’s probably been a pull forward. If you think about that $7,500 tax credit that’s going away at the end of the month and look at how this stock, we just want to pull the chart up here. It looks like it’s a beneficiary of this rotation. You know, look at all of the MAG7 names. The rotation in the MAG7. They basically all other than Apple today underperformed the NASDAQ. So, if you look at this thing, it’s built this base a series of higher lows here. It’s right up against that resistance level from a few months ago. It’s held its 200 day moving average. might you see this thing rally into quarter end? October 1st, 2nd, I think is when they’re going to report Q3 delivery. So, I think from a trading perspective, it looks very interesting.”

Photo by Michael Fousert on Unsplash

Tesla’s EV sales are falling all over the world as the company faces challenges from competitors. Tesla’s global sales in the second quarter fell 14% year over year. Even if Elon Musk increases his focus to fix the company’s problems, it would take a lot of effort to come out of the demand crisis. For example, in California, the largest U.S. market for electric vehicle adoption and sales, Tesla sales fell about 12% year over year in 2024, causing its market share to drop from 60.1% in 2023 to 52.5% in 2024. Was it because Californians are buying fewer EVs? No. Californians purchased more than 2 million electric cars during the year, almost double when compared to the past two years.

Baron Focused Growth Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2025 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles (EVs), solar products, and energy storage solutions, while also developing advanced real-world AI technologies. Despite ongoing macroeconomic challenges and regulatory complexities, shares climbed after Tesla completed a limited commercial rollout of its highly anticipated robotaxi business in Austin—following more than a decade of development and billions of dollars in investment. This milestone signals a potentially transformative shift in the automotive industry and opens up a sizable new market beyond the company’s core operations. Investor sentiment also improved after Elon Musk stepped back from government-related engagements, boosting confidence in Tesla’s near-term execution. Tesla introduced a refreshed Model Y globally, featuring design and performance upgrades, and outlined plans to unveil new mass-market models starting next quarter. Meanwhile, the company is progressing toward scaling production of its humanoid robot, adding another dimension to its long-term growth story.”

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Disclosure: None. This article is originally published at Insider Monkey.