Barclays Sees Cracks in Tesla's Present but Remains Bullish on Its Future

Barclays flags short-term demand risks for Tesla but maintains a bullish long-term view driven by software, autonomy, and energy solutions.
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Tesla: Juggling Present Woes and a Promising Tomorrow

Tesla Inc. (NASDAQ: TSLA), the global electric vehicle (EV) pioneer, has always been a company that invites polarizing opinions. On one side are bullish investors with unshakable faith in Elon Musk's vision; on the other, skeptics who remain wary of Tesla’s stretched valuation and volatile demand cycles. In a recent note, Barclays captured this duality perfectly, highlighting short-term headwinds even as it maintains confidence in Tesla's long-term innovation potential.

Let’s break down Barclays' assessment and what it means for investors.

Barclays' Latest Take: Cracks in the Present

  • Barclays analyst Dan Levy maintained a 'Hold' stance on Tesla, setting a price target of $180 due to various short-term hurdles.

  • Softening Demand: Tesla continues to grapple with demand issues, especially in China and Europe, two of its biggest international markets.

  • Significant discounts aimed at increasing sales have led to a decline in gross profit margins

  • Competitive Pressure: With rising competition from BYD, Rivian, and traditional automakers like Ford and GM, Tesla’s market share faces threats.

  • Lack of Clear Catalysts: Despite past growth surges from product announcements, investors don’t currently see strong short-term triggers.

Despite these concerns, Barclays is not writing Tesla off. Instead, they view the company as positioned for long-term value creation, especially through:

Long-Term Faith: Where Tesla Shines Bright

1. Full Self-Driving (FSD) and AI

Barclays emphasized that Tesla's Full Self-Driving (FSD) capabilities and ongoing investment in Dojo, its AI supercomputer, may unlock vast recurring revenue streams. The robotaxi vision, though delayed, remains a potential game-changer.

2. Energy Storage & Grid Solutions

Tesla’s Megapack business is ramping up. With global attention shifting to renewable energy, battery storage systems may become a profit driver outside the automotive sector.

3. Software-as-a-Service (SaaS) Model

The monetization of Tesla's vehicle software—from in-car entertainment to navigation subscriptions—is a high-margin frontier. It’s an underrated, scalable aspect of Tesla’s evolving business model.

Fundamental Snapshot (As of July 24, 2025)

MetricValue
Market Cap~$565 Billion
PE Ratio (TTM)~72.5
Revenue (TTM)~$104 Billion
Gross Margin~17.5%
EPS (TTM)~$3.12
Cash & Equivalents~$26 Billion
Debt-to-Equity Ratio~0.12
Institutional Ownership~60%+

Interpretation:

Despite soft margins and a lofty PE ratio, Tesla maintains a healthy balance sheet with low debt and ample cash reserves. It’s still in a strong position to invest in innovation while navigating short-term volatility.

Technical Analysis

As of July 24, 2025, Tesla is trading at $190, marginally above Barclays’ target of $180. Here's the short-term technical view:

  • 50-Day Moving Average: ~$185 (Current price slightly bullish over short-term average)

  • 200-Day Moving Average: ~$210 (Still trading below long-term trendline—bearish over broader horizon)

  • Relative Strength Index (RSI): 46 (Neutral; no overbought or oversold signal)

  • MACD: Flat, indicating indecisiveness among traders.

Technical Verdict:
Tesla is range-bound, and the lack of momentum confirms Barclays’ view of no near-term catalysts. However, any strong earnings or future-forward announcements (e.g., Robotaxi Day) could reignite a rally.

What Should Investors Do Now?

For long-term investors, Tesla remains a bet on the future—a future where mobility is autonomous, energy is stored at scale, and cars are as much about software as engines.

However, for swing traders and value-focused investors, the current price levels and slowing growth may not offer the most attractive entry point. Until revenue re-acceleration or new product catalysts appear, the stock might remain sideways or under pressure.

Author’s Note

Tesla remains one of the most innovative companies of our time. Yet even innovation giants are not immune to cycles. As Barclays notes, Tesla's short-term struggles reflect a maturing company in a transitioning global economy, not the end of its growth story.

For investors, it’s important to separate short-term noise from long-term vision. Tesla is playing the long game with AI, energy, and autonomy. If even half of those bets pay off, the company’s true value may still be ahead.

But in the stock market, timing matters as much as potential. Patience and clear conviction will be key for those staying in the game.

Sources:


Location: Mumbai, Maharashtra, India
Welcome to The Financial and Tech Literacy! I’m Awdhesh Kumar, a finance and tech enthusiast with 20+ years of experience in accounts, taxation, and the stock market. This blog simplifies finance and digital topics for all—students, professionals, retirees, and new investors. Learn about stock market strategies, personal finance, mutual funds, tech tools, digital banking, and government schemes. All content is original, practical, and based on real experience—no paid promotions or clickbait. We refer to trusted sources like SEBI, RBI, NSE, and Economic Times. Stay updated, make informed decisions, and grow financially with us. For contact: awdheshdube65@gmail.com.

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