Elon Musk, the owner of Tesla, made headlines recently by asserting that “Extreme execution is needed, but a valuation of $20 trillion for Tesla is possible.” This ambitious statement comes on the heels of a challenging period for the electric vehicle maker. Yet the company is still able to hold onto a $1 trillion-plus valuation. Tesla’s stock was devastated, dropping more than 8% on Thursday alone. That plunge followed the company’s announcement of disappointing earnings for Q2 2025 that had come in below analysts’ projections.
Tesla’s stock performance has been harrowing in recent months. Just in 2025, shares have spiraled down more than 22%, even making the semicon one of this year’s biggest disappointments among megacap tech firms. The company’s Q2 earnings report did not meet market expectations, further contributing to concerns about its future growth and stock stability.
Musk’s remarks were shared on X, the social media network that Musk owns. His comments underscore abundant opportunities for and hurdles ahead of the tech behemoth. Even considering his current crazy valuation, his $20 trillion market cap goal makes it clear that he believes in a stronger and more valuable Tesla than what exists today.
So what were some of the factors driving Tesla’s incredible stock performance over the past week? Economic variables are changing fast, in particularly trade relations between the U.S. and its partners. This has led to a climate of uncertainty for investors. After regulation rollbacks, tariffs are the next most dangerous worry, according to market analysts. Terry Sandven noted that “Tariffs remain an item of uncertainty, and commentary from companies still reflects this ongoing uncertainty.”
As geopolitical tensions rise amid ongoing conflict between Russia and Ukraine and the Israel/Iran situation, paired with the pandemic’s existential shifting of industries. These concerns further complicate an already-maxed economic picture. Sandven added, “You look at the ongoing tariff commentary, you look at geopolitical challenges… Through all that, the equity market has trended higher.” Despite Tesla’s specific issues, their market environment has remained robust, as this quote highlights – a testament to the overall resilience of the broader market.
Tesla is a big enough company that its performance can move the overall tech sector, particularly since it’s often considered a ‘tech’ stock. A series of recent moves has cast doubt on its long-term play and ability to grow. Market analysts are deeply skeptical of Musk’s lofty valuation promise. Not surprisingly at all, they’re trying to figure out its implications, especially in the midst of all this economic uncertainty.