Tesla (TSLA) Stock Slides as Morgan Stanley Downgrade Cites Valuation Concerns, "Choppy" 2026 Ahead
TSLA stock is currently volatile, trading at $439.58 as of the market close on December 8, 2025. While recent news indicates a potential for an end-of-year rally, the stock was just downgraded by Morgan Stanley due to concerns over near-term risks and market valuation, causing a recent dip.
Recent Performance and News
Recent Dip: On December 8, 2025, Tesla shares fell after Morgan Stanley downgraded its rating to "equal-weight" from "overweight," suggesting a "choppy" next year for the stock. The firm raised its price target to $425 from $410, but felt the non-auto business catalysts (such as Optimus and Robotaxi) were already priced in.
End-of-Year Incentives: Tesla has rolled out aggressive end-of-year incentives to boost deliveries before the close of 2025, which may be a factor in potential short-term upward movement, or a sign of softening demand.
European Market Struggle: The company is facing softening demand in Europe, where new registrations have declined, with buyers opting for cheaper alternatives from competitors like Volkswagen and BYD.
Year-to-Date Gains: Despite recent volatility, TSLA has gained around 13% so far in 2025, although it has not yet reached a new high this year.
We can explore the specifics of Morgan Stanley's rating or delve into the potential impact of Tesla's new product launches, such as the lower-priced Model 3 in Europe. Would you like to examine the details of the recent analyst downgrade or look into the product strategy?
