Wall Street analysts predict significant drops of 56% and 64% for two high-performing stocks by the year 2025, making it wise to consider selling before they plummet.
In a recent report, JPMorgan analysts have predicted significant declines in the share prices of both Tesla and Circle Internet Group, citing concerns about their valuations and challenging business environments.
For Circle Internet Group, despite expectations of robust annual revenue growth driven by the expansion of the stablecoin market, analysts see a potential downside. The current average target price of $181.50 implies a 56% drop from the existing price, suggesting that the market may be pricing in risks or overvaluation relative to the company's fundamentals, despite the expected growth.
Circle Internet Group, best known for its U.S. dollar-denominated USDC, the seventh largest cryptocurrency by market value, has recently expanded into payment processing with the Circle Payments Network. The company, which is focused on improving the global financial system with stablecoins and payment processing, has also issued the European euro-denominated EURC.
The Circle Payments Network supports a broad range of money movement use cases, such as supplier payments, remittances, and payroll. The collective market value of stablecoins is estimated to nearly double to reach $500 billion in 2026, and potentially reach $2 trillion, offering significant growth prospects for Circle Internet Group.
Regarding Tesla, JPMorgan’s bearish outlook is driven by operational and market challenges. The company, which accounted for 10% of battery electric vehicle sales through May, down from 16% in the same period last year, has lost significant market share due to increased competition and brand damage.
Tesla CEO Elon Musk expects production of the humanoid robot Optimus to reach 100,000 units monthly within five years, or at least 1 million units annually. However, the company's financial results for the second quarter showed a 13% drop in deliveries, a 12% decline in revenue, a 2 percentage point contraction in operating margin, and a 23% decline in non-GAAP net income.
The expiration of the U.S. electric vehicle (EV) tax credit by the end of Q3 2025 is expected to reduce demand, and brand and leadership controversies related to Elon Musk have damaged Tesla's public perception and possibly consumer demand. Additionally, tariffs and other headwinds have weighed on Tesla's business performance.
These factors have contributed to a bleak earnings outlook and an average target price of $310 for Tesla, representing a 64% downside. Wall Street expects Tesla’s earnings to grow at 20% annually over the next three years, but the operational and market challenges remain a concern.
In summary, JPMorgan analysts foresee major declines in share prices due to valuation concerns and deteriorating fundamentals for Tesla and valuation concerns for Circle despite growth prospects, highlighting the risks and challenges facing both companies in 2025. Circle Internet Group's stock currently trades at $182 per share, while Tesla's current valuation is 186 times earnings.
[1] Source: JPMorgan Report [2] Source: Tesla Q2 2025 Financial Results [3] Source: JPMorgan Analyst Report
- Although Circle Internet Group is anticipated to see substantial growth in the stablecoin market, JPMorgan analysts suggest a potential 56% decline in the company's stock price, citing concerns about its valuation and the market possibly pricing in risks or overvaluation.
- In the same vein, JPMorgan analysts predict a 64% drop in Tesla's share price due to operational and market challenges, such as increased competition, brand damage, and upcoming changes in the electric vehicle (EV) tax credit.
- Despite the expectations of robust growth in the stablecoin market and the expansion of its payment processing network, the current average target price for Circle Internet Group's stock implies a challenging outlook for investors in the stock-market.
