Key Points
- Tesla stock has dropped 29.3% in 2025, the worst among large-cap companies.
- Musk’s public feud with Donald Trump triggered investor concerns and political threats. Tesla’s market cap fell from 8th to 10th place globally.
- Apple also declined, dropping to 3rd place in market value due to challenges in China and the AI sector.
- Microsoft now leads globally, thanks to its AI-driven growth and partnership with OpenAI.
Tesla has emerged as the worst-performing large-cap stock of the year as the company grapples with slowing electric vehicle (EV) demand, CEO Elon Musk’s controversial political associations, and a high-profile clash with former U.S. President Donald Trump.
Tesla’s stock took another hit on Thursday following a threat from Trump on social media to cut off federal contracts with Musk’s companies. The former president’s warning followed Musk’s criticism of Trump’s tax and spending policies on his social platform, X (formerly Twitter). As tensions escalated, Tesla’s market capitalization fell sharply to $917 billion, marking a 29.3% drop since the start of the year—the steepest among the world’s major companies.
Tesla began 2025 as the eighth-largest company globally by market value but has since slipped to tenth. The ongoing feud between Musk and Trump appears to have rattled investor confidence. However, Tesla shares saw a mild recovery on Friday. Reports emerged that White House aides are arranging a call with Musk in an attempt to ease political tensions and stabilize relations.
The broader tech market has also experienced turbulence. Apple, once the world’s most valuable company, has now dropped to the third spot. It faces challenges, including reduced demand in China, potential tariffs from a re-elected Trump administration, and slower innovation in AI. Apple’s market value has declined by over 20%, falling to $2.99 trillion as of Thursday.
In contrast, Microsoft has surged to become the world’s most valuable company, buoyed by strong demand for artificial intelligence. Its strategic partnership with OpenAI and integration of tools like Microsoft 365 Copilot have significantly boosted investor optimism and driven growth.
Tesla’s performance and Musk’s political involvement are closely monitored, particularly as government support and public perception remain crucial to the future of the EV industry.
