Baird downgraded shares of Tesla from "Buy" to "Neutral," saying the Musk-Trump spat has led to more uncertainty and the potential for brand damage.

Tesla stock traded higher early Wednesday as shares continue to recover from last week's sell-off with the feud between Elon Musk and President Trump cooling down.

Tesla ( TSLA 5.66%) stock has tumbled 22% year to date amid a myriad of business and political headwinds, and Wall Street anticipates further declines. The average target price among 55 analysts is $289 per share, which implies 8% downside from the current share price of $316.

Tesla Inc dropped 14% in a single day yesterday, representing one of its most significant one-day falls in the past few years.

"It is a convergence among three of our major platforms. So robots, energy storage, AI," Wood said of Tesla.

Traders dumped Tesla after Musk quickly responded to Trump's criticism with social media posts that stepped up criticism of the president's tax bill.

The robotaxi concept and the FSD that powers it are potentially a huge earnings driver for Tesla. One of Tesla's most vocal and visible supporters, Cathie Wood's Ark Invest, which expected a valuation of $2,600 per share for Tesla in 2029, relies on a model that prescribes 88% of the company's value from robotaxis, compared to just 9% from EVs.

Tesla stock extended declines from earlier in the week as Trump and Musk traded words over the GOP budget bill, which Musk has described as an "abomination."

Tesla (NASDAQ: TSLA) is one of the leaders of the electric vehicle (EV) industry, but investors are more focused on its autonomous full self-driving software (FSD), which CEO Elon Musk believes could help it become the most valuable company in the world.

Tesla share rose in early trade after plunging 14% Thursday following a harsh online exchange between Elon Musk and President Trump.

Tesla faces an existential test this month as it aims to launch self-driving “robotaxis” in its home base of Austin, Texas, where public-safety officials are increasingly concerned about the state’s anti-regulation stance toward autonomous vehicles.