Tesla stock is down 25% in 2026, and one market strategist thinks there’s more pain ahead through year-end.
Gordon Johnson, the founder and CEO of market research firm GLJ Research, recommended “aggressively” shorting the EV maker’s stock last year, and he maintains that view in 2026.
Johnson spoke to Business Insider about his short thesis on Tesla stock, explaining the reasons for his firm’s $25 price target, which would represent a 93% plunge from Friday’s levels.
“I think Tesla’s gonna go down as the single greatest stock short in the history of the stock market,” he said.
His view is similar to that of other Tesla bears, including veteran fund manager George Noble, who recently described Tesla as the stock market’s biggest bubble.
Johnson is mainly concerned about the company’s high valuation, as the forward price-to-earnings ratio is about 175x, while its sales continue to decline and demand for its EVs weakens in both the US and the key China market.
“At today’s price, the market is pricing Tesla for explosive growth, and [we’re] actually seeing the opposite,” he said. “What that tells you is that the stock is grossly overvalued.”
Johnson attributed Tesla’s premium valuation to Elon Musk’s history of making big claims about Tesla’s products, which end up getting priced into the stock long before the vision is realized.
He added that he thinks the slow rollout of Tesla’s robotaxis has been a disappointment as well. In Johnson’s view, every day Tesla doesn’t deliver on expanding its robotaxi fleet, investors will worry that the company isn’t executing on Musk’s promises.
Yet, Johnson thinks Tesla’s problems go deeper than delayed robotaxi expansions. In a recent note, he discussed options trading in Tesla stock, highlighting the concentrated trading activity seen in 2021, which has since faded, with options volume dwindling in line with the stock price.
Johnson thinks the pattern is directly correlated with Tesla stock’s high volatility, and ultimately, its recent streak of losses.
Gordon Johnson/GLJ Research
Johnson added that if he is correct about the decline of options-fueled momentum, Tesla will revert to trading on its fundamentals, which he thinks will push it down to the $25 range.
“On a fundamental basis, Tesla is in a state of structural decline and negative earnings growth,” he said. “If that fundamental story befell any of the mag six, their stock prices would be annihilated.”