Tesla’s stock has encountered significant turbulence in 2026, experiencing a 25% decline, prompting market strategist Gordon Johnson to issue warnings of further challenges as the year progresses. Johnson, who heads GLJ Research, expressed his firm’s ongoing bearish stance, advocating for aggressive short selling of Tesla shares, a recommendation he first made last year.
In a discussion with Business Insider, Johnson laid out the rationale behind his bleak outlook, reiterating a price target of just $25 per share, which would equate to an astonishing 93% drop from recent trading levels. He declared his belief that Tesla is poised to become “the single greatest stock short in the history of the stock market.”
Supporting Johnson’s perspective is veteran fund manager George Noble, who has also criticized Tesla as a critical bubble in the market. Central to Johnson’s argument is Tesla’s inflated valuation, marked by a forward price-to-earnings ratio hovering around 175x. This comes at a time when the company is witnessing declines in sales and a weakening demand for electric vehicles, notably in both the U.S. and major market China.
Johnson remarked, “At today’s price, the market is pricing Tesla for explosive growth, and we’re actually seeing the opposite,” labeling Tesla’s stock as “grossly overvalued.” He attributes much of this valuation to Elon Musk’s pattern of making ambitious promises that tend to be priced into Tesla’s stock long before tangible results are achieved. Johnson also pointed out that the sluggish rollout of Tesla’s much-anticipated robotaxi fleet has added to investor discontent. The long delay in expanding the fleet raises concern regarding the company’s ability to meet Musk’s ambitious goals.
Furthermore, Johnson highlighted that Tesla’s troubles extend beyond the delays in its robotaxi ambitions. He noted a significant drop in options trading activity relative to Tesla’s stock price, contrasting with the concentrated trading seen in 2021. According to Johnson, this decline is intertwined with the stock’s heightened volatility and its recent run of poor performance.
If Johnson’s predictions hold true regarding the diminishing momentum fueled by options trading, he anticipates that Tesla will revert to its fundamental valuation, which he believes will drive its stock price down to the $25 mark. He asserted, “On a fundamental basis, Tesla is in a state of structural decline and negative earnings growth,” warning that if any of the “mag six” companies faced a similar trajectory, their stock prices would be severely impacted.
As investor sentiment continues to shift, all eyes are on Tesla to see if it can navigate what many analysts view as a precarious landscape.
