This development highlights a fascinating divergence between investor sentiment and market momentum, as Tesla continues to defy bearish calls and attract bullish capital amid the broader tech sector’s recovery.
Ross Gerber: From Tesla Bull to Open Critic
Ross Gerber, the co-founder and CEO of Gerber Kawasaki Wealth & Investment Management, has been one of Tesla’s most vocal proponents for years. He frequently praised the company’s innovation under Elon Musk and remained bullish through multiple controversies and stock declines. His firm even held Tesla among its top equity positions for years.
However, Gerber’s stance has shifted dramatically. In a recent interview with CNBC and posts on X (formerly Twitter), he criticized Tesla’s business trajectory, citing declining growth rates, market saturation, and intensifying global competition particularly from Chinese electric vehicle (EV) manufacturers like BYD and NIO.
“Tesla is no longer the hyper-growth story it once was. The market is becoming crowded, and Tesla is facing real challenges in sustaining margins, especially in China,” Gerber stated in a CNBC interview.
Gerber’s remarks came shortly after he disclosed that his firm had significantly reduced its Tesla exposure, citing concerns over slowing innovation and increasing investor distraction due to Elon Musk’s growing involvement in other ventures like X (Twitter), SpaceX, and xAI.
Market Moves in the Opposite Direction
Despite Gerber’s cautionary tone and broader skepticism from parts of the financial media, Tesla’s stock has shown remarkable resilience, rallying more than 50% in a matter of weeks. The stock, which dipped to around $138 earlier this year, is now trading above $210 as of May 21, 2025.
The market’s optimism appears to be fueled by several key factors:
1. Positive Delivery Data
Tesla recently reported better-than-expected delivery numbers for Q1 2025, particularly in North America and the Middle East. While sales in China showed signs of cooling, growth in other regions helped balance the narrative.
2. Advances in AI and Full Self-Driving (FSD)
Investors have shown renewed enthusiasm for Tesla’s Full Self-Driving software, with recent updates suggesting meaningful improvements in autonomous driving capabilities. Additionally, Tesla’s continued investment in Dojo, its AI supercomputer, and the Optimus humanoid robot project have reignited the tech and innovation narrative.
3. Broader Tech Sector Rally
The recent recovery in the Nasdaq-100 and a broader shift toward risk-on sentiment in tech stocks have also contributed to Tesla’s bullish momentum. Investors appear to be rotating back into high-growth names following a volatile start to the year.
Analyst Views: Bullish Divergence
Several Wall Street analysts have diverged from Gerber’s bearish stance, suggesting that the market is now more focused on long-term technological upside than on short-term delivery challenges.
Wedbush Securities recently raised its Tesla price target to $275, citing strong institutional demand and promising signs in software monetization.
“While Tesla is certainly facing fierce competition, the company remains years ahead in areas like autonomous driving and vertical integration. Investors are buying into the future potential,” said Wedbush in a client note.
Likewise, Morgan Stanley reiterated its Overweight rating, pointing to Tesla’s strategic focus on robotics, AI, and next-gen battery technology as possible game changers in the next 3–5 years.
Retail Sentiment: Still Strong
According to data from Fidelity and Robinhood trading platforms, retail investors remain largely bullish on Tesla, with buy orders significantly outpacing sell orders since late April. Online forums such as Reddit’s r/wallstreetbets and StockTwits have seen a noticeable uptick in Tesla-related bullish sentiment.
This momentum among retail investors reflects a key theme: faith in Elon Musk’s long-term vision despite concerns over short-term fundamentals.
Is Ross Gerber Right to Exit?
While Ross Gerber’s concerns are valid—particularly regarding margin pressure, intensifying global EV competition, and executive focus—Tesla has often defied conventional valuation logic. Gerber’s call for a correction may well prove correct over the medium term, especially if innovation initiatives fail to deliver on investor expectations.
However, with the market clearly rewarding narrative over numbers for now, the divergence between Gerber’s caution and the Street’s optimism underlines a central tension in investing: the conflict between fundamentals and future potential.
Final Word
Tesla remains one of the most polarizing companies on Wall Street. With shares rebounding sharply, Gerber’s exit raises critical questions about timing, conviction, and long-term belief in innovation-led growth.
While it’s too early to judge whether Gerber’s decision was premature, what is clear is that Tesla continues to command investor attention, whether from bulls, bears, or cautious spectators.
For ongoing updates on Tesla’s stock, earnings, and market movement, visit the official TSLA quote page on MarketWatch.
