Al Root

Tesla stock was falling in early trading Monday as the company embarks on one of its most critical months in recent memory.

Shares of the electric vehicle maker were 2.2% lower in premarket trading at $339.20, while S&P 500 and Dow Jones Industrial Average futures were 0.5% and 0.4% down, respectively.

Shares are moving with the company on the cusp of launching its robotaxi service in Austin, Texas, later this month. Investors expect the AI-trained self-driving taxi service to unlock a new wave of growth.

Coming into Monday trading, Tesla stock was up 46% since its April 22 first-quarter earnings conference call when Tesla management said they were on track to launch the robotaxi service.

Shares have done well despite relatively weak results in the company's car business. Car sales fell 13% year over year in the first quarter, and operating profit, at $399 million, fell 66%.

Tesla likely needs a smooth robotaxi launch to keep the stock's momentum going. Even that might not be enough. Tesla stock trades for roughly 180 times estimated 2025 earnings, up from about 90 times before first-quarter earnings.

That valuation led Future Fund Active exchange-traded fund cofounder and long-time Tesla bull Gary Black to sell all his Tesla stock. It's the first time since 2021 that he hasn't held shares, according to Black.

He maintained his $310 price target. Still, he feels like the stock is due for a pause. The pause could come in June. The stock market is forward-looking. Investors were looking forward to June. Now it's here. That alone can drive some profit-taking.

Write to Al Root at allen.root@dowjones.com

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June 02, 2025 04:55 ET (08:55 GMT)

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