Tesla stock rebounded in Friday's stock market, clawing back nearly 4% of the more than 14% dive Thursday that tracked the feud between President Donald Trump and Tesla CEO Elon Musk as their debate over the Republican spending and tax bill went into overdrive.
There have been mixed reports that the president and Musk could be speaking privately on Friday. Politico reported late Thursday that White House aides had scheduled a call on Friday between Trump and the Tesla CEO. However, Bloomberg reported early Friday there were "no plans" for a call.
According to a Wall Street Journal article Friday morning, Trump "has no plans" to call Musk and "has little interest in talking" to the Tesla head. Trump is also considering selling or giving away his Tesla vehicle, the WSJ reports.
Tesla stock dropped 14.3% to 284.70 during Thursday's stock market action — falling below its 21-day exponential moving average, the 200-day moving average and 50-day line as Musk and Trump traded insults and threats online.
TSLA on Friday moved 3.7% higher to 295.14, closing just above the 50-day moving average. The stock ended the week down 14.8%.
Prior to Thursday's blowup, Musk repeatedly criticized Trump's tax bill in recent days. The President, speaking from the White House early Thursday, told reporters that Musk was angry the administration decided to eliminate Biden-era EV credits and to move away from a Musk-backed head for NASA.
However, the criticisms soon ratcheted up, with Musk posting to X, while Trump responded on Truth Social. Trump finally threatened to terminate Musk's government contracts. Musk retorted with a post claiming that Trump was in the "Epstein files."
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote in a research note early Friday that "the bromance between Musk and Trump quickly grew into 'frenemies' in junior high school" on Thursday.
"The social media and war of words back and forth is not good for anyone and put massive pressure on Tesla shares with fears that Trump will turn from friend to foe and create a tough regulatory environment for Musk," Ives wrote, referring to the long-held belief that Trump would clear the regulatory path for autonomous vehicles.
"We believe cooler heads will prevail today and into the weekend (hopefully) as according to media reports the White House has scheduled a call between Trump and Musk today with hopes these good friends can make up and start to resolve their differences," the analyst added.
Tesla Stock Performance
Tesla's plunge on Thursday erased a strong move from an aggressive entry of 294.86 cleared on May 9.
The drop could be read as a warning that the upcoming Tesla robotaxi launch is a risk event that could trigger huge moves, and not necessarily on day one. CFRA analyst Garrett Nelson wrote late Thursday that "Musk is genuinely upset about the projected deficits and other aspects" of the current tax bill.
"However, we think the stock's sell-off reflects a number of other factors: an unjustified run-up following its Q1 earnings release, ongoing market share losses in China and Europe, and a realization that next week's Robotaxi launch in Austin could disappoint," Nelson said.
"Similar to other major Tesla events in the past, shares have appreciated sharply leading up to the event, raising the probability of a 'sell the news' reaction. We remain at Hold, expecting more volatility in the near term. Buckle up!" Nelson added.
Cathie Wood's ARK Invest has also repeatedly trimmed Tesla holdings in recent days. Wood sold Tesla on Monday, after making similar moves three times last week, selling a combined nearly 50,000 shares.
Meanwhile, Milan Kovac, the head of engineering for Tesla's Optimus humanoid robot program, is reportedly leaving the company, according to a Bloomberg report late Friday.
Kovac reportedly told other staff members Friday he is leaving Tesla effectively immediately. Bloomberg reports that Tesla autopilot leader Ashok Elluswamy will take over the Optimus robot lead. Kovac has only been in charge of the Optimus program since October 2024.
TSLA stock is now down about 27% for the year, despite surging on robotaxi bets following the April 22 Q1 conference call. The stock is also down 39.6% from its all-time high of 488.54.
Tesla stock has a 21-day average true range of 5.30%. The ATR metric, available on IBD's MarketSurge charting tool, gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
The S&P 500 and Nasdaq are now in a power trend. Investors can buy stocks with ATRs of up to 8%, though they should be wary of being too concentrated in high-octane names.
Tesla stock has a 70 Composite Rating out of a best-possible 99. The stock also has an 85 Relative Strength Rating and a 59 EPS Rating.
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