Tesla stock slips below $429 as Michael Burry calls it ridiculously overvalued

Highlights

- Tesla stock slipped below $429 following Michael Burry’s renewed criticism, labeling the company “ridiculously overvalued.”

- Technical indicators show fading momentum near the $440 resistance, with support holding around $400.

- Investor concerns are rising over shareholder dilution, European sales weakness, and reliance on future AI-driven growth.

Price action this week reflects a slight pullback from recent highs near $433.39. The 50-day moving average is currently estimated near $418, while the 200-day average sits lower, near the $375 mark. This suggests the stock is in a medium-term uptrend but is beginning to lose momentum near the upper edge of its range. Traders are watching for a potential breakout or rejection at this resistance level, which could set the tone for December trading.

Volume has also started to decline slightly compared to the surge seen in October and early November. This reduction in volume, coupled with price hesitation near $430–$440, indicates some investor caution. A decisive breakout above $440 would open the way to test the psychological $480 level, while any close below $400 could lead to a breakdown toward $375 or even $350.

Tesla stock price dynamics (October 2025 - December 2025). Source: TradingView

The Relative Strength Index (RSI) has fallen to the mid-50s, indicating that Tesla is neither overbought nor oversold. However, should RSI drop below 45 in the coming days, it could confirm a bearish shift and foreshadow a correction. This neutral RSI level reflects current market indecision, as bulls and bears await stronger directional cues from either macroeconomic data or company-specific news.

Burry calls Tesla “ridiculously overvalued”

Investor debate around Tesla’s valuation reignited this week following a sharp critique from Michael Burry, the hedge fund manager famous for predicting the 2008 financial crisis. In a recent blog post, Burry described Tesla as "ridiculously overvalued" and highlighted several concerns that could weigh on the company’s long-term valuation.

Burry specifically cited Tesla’s rate of shareholder dilution, which he says has averaged around 3.6% annually. He also raised alarms over Elon Musk’s upcoming performance-based compensation package, which, if realized, could significantly dilute existing shareholders. Burry wrote, “With the full package in play, Tesla could issue more than 300 million new shares in the coming years — a red flag for any investor focused on earnings per share.”

These warnings arrive at a time when Tesla is also facing headwinds in Europe. According to recent reports, Tesla’s market share in key EU countries declined sharply in November. Competitive pressure from BYD, Volkswagen, and Stellantis continues to erode Tesla’s dominance in the European EV space.

Path to $460 only if $440 breaks cleanly

In the near term, Tesla’s price trajectory hinges on its ability to break above $440 resistance. If the stock can maintain support at $420 and gather bullish momentum on stronger volume, it could rise to test $460–$480 over the next 2–3 months. Continued investor enthusiasm around Tesla’s AI and robotics initiatives could provide the necessary sentiment boost.

However, downside risks remain significant. A break below $400 would likely trigger stop-loss orders and bring bears back into control. In that case, Tesla could quickly slide toward the $370–$375 region, where the 200-day moving average may offer limited support.

Tesla’s vehicle sales in France dropped 57.8% year-over-year in November, with only 1,591 units registered. Year-to-date, Tesla is down over 33% in the country, significantly underperforming the broader French auto market’s 4.9% decline.

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