Trip Chowdhry, an analyst who's been bullish on Tesla for years, just flipped to a sell rating with a $150 price target.
That's a 59% drop from Friday's close at $367.
Now, before you dismiss this as just another analyst flip-flopping, consider: Chowdhry has been a Tesla permabull through thick and thin. When other analysts were skeptical, he was in the true believer camp. For him to switch sides is like watching your most loyal friend tell you they're worried about you.
His reason? The AI narrative has collapsed.
For the past two years, Tesla's valuation has been propped up by the promise that it's not just a car company - it's an AI company. Self-driving technology, robotaxis, humanoid robots, all powered by industry-leading AI.
Except... where is it? Full Self Driving is still "supervised." The robotaxi fleet doesn't exist. The Optimus robots shown at events are largely remote-controlled props.
Chowdhry is calling out what he terms "investment thesis inertia" - the tendency for investors to keep believing a story even after the evidence has shifted. Tesla's AI story worked when the market was desperate for AI exposure and willing to pay any price. Now? Not so much.
Is this Tesla-specific or broader AI concerns?
Little bit of both. The broader AI trade is definitely under pressure. Data center stocks got hammered Monday on concerns about energy costs. If oil stays high and electricity gets expensive, those razor-thin AI margins (that aren't actually razor-thin, but that's another story) will compress.
But Tesla has a specific problem: it's valued like a tech company but it makes cars. And car companies trade at 8-10x earnings, not 40x. If the market decides Tesla is just an EV maker without the AI magic, valuation has a long way to fall.
The $150 target assumes: Tesla trades at a premium to traditional automakers but not at tech multiples. Say 15x earnings instead of 40x. Do the math and you get somewhere around $150.
