Well-Known Analyst: TSLA Could Be Impacted by Musk’s Political Activities for Another Year

Tesla (TSLA) could be negatively impacted for another year by the political activities of its CEO, Elon Musk, according to Gene Munster, managing partner and co-founder at Deepwater Asset Management. Munster made the comments on CNBC earlier this week.

But over the longer term, Musk’s activism will not damage Tesla, the analyst asserted.

Musk Will Boost Tesla Over the Long Term, Munster Says

“Over the longer term, Musk will do what’s right for Tesla,” Munster stated. The analyst suggested that the company’s increased emphasis on autonomous driving and robotics will ultimately lift its shares.

On the other hand, he thinks that the company’s financials will deteriorate this year and warned that the shares could drop further in 2025. Indeed, according to Munster, Musk recently hinted that the company’s financials are likely to weaken in 2025 when he said that its performance over the next 6 to 12 months is “difficult to predict.”

However, Munster, noting that the shares still have a very high forward price-earnings ratio, argued that investors continue to believe in Musk and his strategy.

More About Tesla

Analysts on average expect the company’s earnings per share to climb to $2.66 this year from $2.42 last year. In 2026, the mean estimate calls for its EPS to rise to $3.58.

According to Yahoo Finance, the shares have a forward P/E ratio of 97 times.

While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as TSLA but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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