Meet the Tesla diehards sticking with the stock despite its disastrous year

Bartash, a 44-year-old behavioral health specialist in Harrisburg, Pa., initially poured $7,000 into Tesla stock. In 2022, he took advantage of the dip in shares to invest an additional $26,000. Today, his six-figure investment makes up about 80% of his portfolio.

“In the long term, I trust Elon Musk," Bartash said. “He’s Steve Jobs but multiplied by an order of magnitude. I’m not a cultist, but it’s like biblical proportions when he talks about wanting to democratize space and going to Mars."

Bartash isn’t alone. Scores of individual investors have piled into Tesla shares in recent years, lured by the company’s technology, visionary chief executive and mammoth stock market gains. Through the end of last year, the stock was one of the top 10 wealth-creating companies for investors over the past decade, according to Morningstar, rising from about $10, on a split-adjusted basis, to $250.

But the shares have since hit a rough patch, down almost 40% in 2024. Tesla is the second-worst performer in the S&P 500 and off more than 60% from its peak in November 2021. The company’s market value fell below $500 billion last week for the first time in nearly a year, after climbing as high as $1.235 trillion.

The stakes are high for Tesla going into its quarterly report Tuesday. The market for its battery-powered cars has weakened, and profit margins have narrowed. The company has also delayed deliveries of its much-awaited Cybertruck and is recalling 3,878 of them to repair or replace faulty accelerator pedals. It also recently unveiled plans to slash more than 10% of its global workforce.

Individual investors, for the most part, have been undeterred. According to estimates from Vanda Research, they have poured a net $5.9 billion into Tesla shares this year, more than any of the other big tech stocks in the Magnificent Seven. Individual investors also account for a higher share of Tesla’s total trading volume than any of the other big tech stocks, according to Nasdaq Data Link.

Richard Virgilio, a 50-year-old marketing executive in Asbury Park, N.J., first bought a Tesla Model Y in early 2020 and later plopped $50,000 into Tesla shares. Although that investment is down 50% on paper, the stock still makes up about two-thirds of his total equity portfolio.

Tesla’s recent stumble has made its valuation look more attractive, though it remains well above the multiples of the other popular tech stocks. Tesla trades at about 50 times expected earnings over the next 12 months, below its three-year average of about 70. The S&P 500’s multiple is 20.

“Every time I go onto my Fidelity account and look and see it’s lower and lower, it’s really a killer," he said.

Virgilio says he hasn’t sold because many of the things that first attracted him to the “laptop on wheels" still hold true. Among the features he likes are Tesla’s dog mode climate controls, self-driving application and mileage.

But he says he has been frustrated by the stock declines, the company’s design choices and Musk’s foray into politics. For those reasons, he is considering selling shares for harvesting tax losses.

“When we bought the Model Y, we waited four months for it," Virgilio said. “At that time, it was kind of like owning a Birkin [bag]. It’s not like that anymore."

Other investors are betting against the stock outright.

Tesla has long been among the most shorted U.S. stocks. Short sellers borrow shares and sell them with the hope of profiting by buying the stock back at a lower price later. The rapid increase in the shares during the pandemic was exacerbated in part by the many short sellers who were forced to buy back shares to close their losing positions.

This year, they are sitting on collective gains of $8.33 billion, after losing $12.25 billion in 2023, according to data from S3 Partners. Roughly 4.2% of the stock’s free float is currently sold short, up from an average of 3.3% at this point last year, but down from an average of 10% in 2020.

In the options market, traders are also positioning for further declines in Tesla shares. Some of the most actively traded Tesla contracts in recent sessions have been puts tied to the shares’ slipping to $145 or $148, Cboe Global Markets data show. Puts give traders the right to sell shares at a specific price, by a stated date. They are often used to hedge positions or bet on a steeper decline.

Tesla remains a contentious stock among the analysts on Wall Street. Of the 53 who cover the stock, 18 rate the shares a buy, 25 a hold. The remainder have a negative rating. Their average price target is $189.11, or about 30% above Friday’s closing price of $147.05, according to data compiled by FactSet.

Steven Medeiros, a 20-year-old student living in Wayne, N.J., considers himself among the Tesla faithful.

He started investing in Tesla in early 2023 with the money he received from an injury lawsuit and later sold about half of his $100,000 position to pay off his Tesla Model 3 Long Range.

“It does kind of stink watching it fall down, but I’m relatively comfortable still holding it," Medeiros said. “I practically paid for my entire Tesla with just the gains that I made with the Tesla shares. I always think about it as if I got a free car out of it."

He plans to sell more if shares go back above $200 and buy if shares dip below $120. His car is staying put.

“Never would I sell my car," Medeiros said.

Gunjan Banerji contributed to this article.