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Tesla (TSLA) has been a major laggard in the stock market over the past year, trailing the broader S&P 500 by a wide margin. As of August 12, 2026, the electric vehicle maker’s shares are trading at $353.00, down 28.4% from their 52-week high of $498.83 set in December 2025. In contrast, the S&P 500 Index ($SPX) has gained 19.3% over the same 12-month period, highlighting a stark divergence.
The underperformance deepened in the last three months: TSLA fell 19.2%, while the SPX rose 2.8%. This marks a significant reversal for a stock that once defined the EV boom. Investors are now questioning whether Tesla can regain its growth momentum amid intensifying competition and shrinking margins.
The most immediate catalyst for the recent selloff was Tesla’s second-quarter 2026 earnings report, released on July 22. The company posted revenue of $28.2 billion, beating analyst expectations. However, adjusted earnings per share came in at just $0.33, well below Wall Street’s forecast, raising red flags about profitability. The stock plunged 14.5% on the day, and it has yet to recover.
Profit margins have been under pressure from aggressive price cuts across Tesla’s lineup, aimed at defending market share in China and the U.S. While the strategy has boosted delivery volumes, it has compressed earnings faster than many analysts anticipated.
From a technical standpoint, Tesla shares have been trading below both the 50-day and 200-day moving averages since the start of July 2026. This is often viewed as a bearish signal, suggesting the stock is in a downtrend. The moving averages are now acting as resistance levels, with the 50-day MA around $385 and the 200-day MA near $410.
Momentum indicators like the Relative Strength Index (RSI) are hovering near 40, indicating oversold territory but not yet at a level that typically triggers a reversal. Volume has been elevated on down days, pointing to persistent selling pressure.
Despite the poor price action, Wall Street remains cautiously optimistic. Of the 42 analysts covering Tesla, the consensus rating is “Moderate Buy,” with a mean price target of $397.17 — implying a 12.5% upside from current levels. However, that target has been drifting lower in recent weeks.
Exclusive insight: On August 10, BofA Securities lowered its price target for TSLA from $420 to $380, citing slowing demand in Europe and the risk of further price cuts. Meanwhile, Morgan Stanley reiterated a “Hold” rating, highlighting that Tesla’s valuation still assumes a premium for its robotaxi and energy storage businesses, which have yet to deliver meaningful revenue.
When compared to traditional automaker General Motors (GM), Tesla’s performance looks even weaker. Over the past 12 months, GM shares have surged 48.6%, fueled by strong demand for its ICE and hybrid vehicles, as well as a successful expansion of its Ultium battery platform. GM’s earnings have consistently beaten expectations, while Tesla’s have faltered.
This divergence underscores a shift in investor sentiment: The EV market is no longer a high-growth story for all players. Established automakers with diversified powertrains are gaining favor, while pure-play EV makers face margin headwinds.
Looking ahead, several catalysts could lift Tesla’s stock. The planned launch of the next-generation vehicle platform (expected in 2027) is a key long-term driver. Additionally, the company’s energy storage segment is growing rapidly, with Q2 2026 revenue from that division
