Jim Cramer Calls Market Decline ‘Man-Made’ and Breaks Down 15 Stocks

5. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 126

Cramer placed Tesla, Inc. (NASDAQ:TSLA) in the bottom tier of the Magnificent Seven and questioned its valuation and fundamentals. He pointed to weakening auto demand, tariffs, and Elon Musk’s polarizing persona as key risks. Here are Cramer’s thoughts:

“Finally there’s Tesla, which has been cut in half from his highs. At a very high level the bull case here is that the president’s close relationship with Elon Musk should give the company major advantages as it moves into self-driving cars or humanoid robots. But man, Tesla’s core auto business has collapsed, and the tariffs will be terrible for them. Musk’s persona is a big negative for huge swath of customers or potential customers. Worse, Tesla is still the most expensive stock in the Magnificent 7 by a large margin, trading at 87 times this year’s earnings estimates. And I’m not even sure we can trust those estimates because their auto business is in such bad shape.”

ClearBridge Large Cap Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2025 investor letter:

“Our active underweight to the Magnificent Seven added more than 100 basis points to relative returns for the quarter, with underweights to EV maker Tesla, Inc. (NASDAQ:TSLA) and Google parent Alphabet being among the largest relative contributors. We added to both positions, taking advantage of what we view as short-term weakness as Alphabet missed high expectations for cloud revenue growth in its latest quarter, while Tesla worked through negative sentiment over CEO Elon Musk’s role in the Trump administration.”