With new record highs being set in stocks markets seemingly every day, it’s easy to forget how volatile indices have been in 2025. But investors in individual companies have endured even more of a rollercoaster ride. One example has been Tesla (NASDAQ: TSLA) stock.
Great gains… eventually
The electric vehicle (EV) maker’s year so far can probably be summed up in one word: eventful.
Starting 2025 close to the $400 mark, Tesla’s share price proceeded to nearly halve in only a few months. Elon Musk’s (brief) new role in Donald Trump’s administration didn’t sit well with many investors, as well as owners of the cars.
However, anyone buying in early April would have done very well indeed. Over the summer, the stock’s recovered well due to Musk stepping back from central government politics and the US President’s postponement of various tariffs. In fact, a £10,000 investment back in April would now be worth somewhere in the region of £15,100.
By comparison, owning an S&P 500 tracker would have left our investor with about £13,400. That’s still a marvellous return, of course. And it really does provide yet more evidence that buying when others are running for the exits has the potential to work out very well indeed.
Just add patience, right? If only it was so easy.
Grab the popcorn
Predicting exactly where share prices will go in the very near term is arguably a waste of time. And given Musk’s tendency to delight and, quite frankly, terrify holders in roughly equal amounts, I’d say that’s particularly true with Tesla stock. But it’s still worth considering what may move the needle in either direction.
A Tesla bull would draw attention to the recent launch of the Robo-taxi in Austin. While this remains limited for now, evidence that the service has successfully expanded into other cities by the end of the year would be positively received by the market. Elsewhere, an interest rate cut in the US would likely go down well with most growth-focused companies, including this one.
Tesla bears would likely state that Musk’s involvement in politics and social matters has done too much damage to the brand at a time when it could least afford it. Competition from Chinese rivals, for example, is getting more intense. If sales fall by more than expected, the market may show its displeasure, especially given the company’s perennially high valuation.
Regardless of which side is proved right, it will be interesting for those watching from the sidelines.
That’s what I’m doing
We shouldn’t overlook the fact that it would have been very easy for those who bought at the start of 2025 to doubt their own stock-picking ability only a couple of months down the line. All that negative press — and the subsequent slump — was pretty scary. I tip my Foolish hat to anyone who held on, but even more those who bought at the low. You’re made of strong stuff!
But that instability is why I prefer to own a slice of Tesla via the exchange traded funds route. This is even though any further rise in its share price will be massively diluted.
For those with stronger stomachs, I still think the shares are worth considering given the company’s long-term potential. Just don’t expect a smooth trip.
