Tesla may have seen a powerful comeback in its share price recently, soaring nearly 45% in just one month, but behind the scenes, a very different story is unfolding. Despite the rally, big-name investors are losing faith, and the red flags are growing louder. Over the past few months, Tesla has faced intense headwinds not just from market conditions, but from the man at the center of it all:

CEO Elon Musk and His controversial political stance and unpredictable behavior have turned off many consumers globally, putting pressure on Tesla’s international sales. Even though the stock has shown signs of life, there’s no solid ground underneath. Every rise in TESLA is quickly followed by a fall. This up-and-down pattern shows that, in today’s uncertain economy, Tesla is not as steady or prepared as other tech giants to handle shifting market dynamics. But the problems don’t stop there. One of the biggest warning signs? Major investors are bailing out fast.

Billionaire Philippe Laffont’s Fund Slashes Tesla Investment

When the market gets shaky, hedge funds are known to protect themselves and right now, Tesla is no longer the golden child. Coatue Management, a major hedge fund led by billionaire investor Philippe Laffont, made a bold move in Q1 2025. According to 13F filings, the firm dumped 600,000 Tesla shares, shrinking its position from 2.2 million to 1.6 million. That’s $600 million worth of Tesla stock gone.

And Tesla wasn’t the only big name Coatue cut down. In the same quarter, the fund:

  • Sold 1.4 million shares of Nvidia, reducing its stake from 10 million to 8.6 million
  • Trimmed its Microsoft shares from 3.5 million to 3.3 million
  • Fully exited its positions in ServiceNow and Qualcomm

This shift in holdings clearly shows Coatue is cooling off on U.S. tech giants and Tesla ranks far lower than Nvidia, Microsoft, or Meta in the fund’s portfolio. This strategic retreat screams one thing: a loss of confidence in Tesla and Elon Musk. Even Wall Street analysts are taking a cautious tone. Barclays analyst Dan Levy recently maintained a hold rating on TSLA and cut his price target from $325 to $275 back in April.

It’s Not Just One Fund Even Insiders Are Dumping Shares

Coatue isn’t alone. More and more major Tesla shareholders are reducing their exposure and even people inside the company are cashing out. In February 2025, Elon Musk’s own brother, Kimbal Musk, sold 75,000 shares, according to SEC Form 4 filings.

That was just the beginning. Robyn Denholm, a Tesla board member, has also been quietly selling. In fact, “In just the last six months, she has sold $198 million in Tesla shares. These sales were executed under a 10b5-1 agreement that allows insiders from publicly traded companies to sell their shares,” as reported by TheStreet’s Tony Owusu.

This wave of selling from both insiders and elite hedge funds shows one thing clearly: confidence in Musk’s leadership is rapidly fading. Even though Musk has recently promised to focus more on Tesla, the sell-off hasn’t stopped. Investors aren’t waiting for promises; they’re demanding results. Until the company shows a real turnaround, many more could follow this exit path.

Tesla’s story this year has been a rollercoaster. While stock prices may rise in the short term, the cracks are starting to show. With big money walking away and even Tesla’s closest insiders offloading shares, it’s clear that Elon Musk’s magic isn’t enough anymore. Without a strong and sustainable turnaround, Tesla might face even more turbulence ahead.