Avoid Tesla, Intel, oil and German equities in 2025 say analysts
Wall Street analysts have pencilled in strong gains for equity markets in 2025, following a robust performance in 2024.
However, while analysts are optimistic about the outlook for the market as a whole, there are some assets Wall Street believes will underperform in the year ahead.
Here are the four assets analysts are advising investors to avoid this year.
Tesla
On the first day of trading in 2025, Tesla was the worst performer in the entire S&P 500, falling more than six per cent.
Is this a sign of things to come?
The car company’s stock fell sharply this week after delivery numbers for the final quarter of 2024 fell short of expectations.
“Trump’s victory in the US elections sent Tesla stock soaring, given the staunch support provided by Elon Musk during his campaign and his subsequent appointment in the administration,” explained Susannah Streeter, head of money and markets at Hargreaves Lansdown.
However, as Chinese rival BYD continues to grow in popularity, and Musk’s attention is diverted away from the business and towards politics, things could start to look tough for Tesla.
“A dip in demand for electric vehicles has been tricky to navigate and cost-cutting efforts are a core part of the near-term margin recovery strategy,” added Streeter.
German stocks
The German economy undeniably had a lousy year in 2024, but its stock market shrugged off the bad news to put in a strong performance.
The German economy narrowly avoided recession but contracted by 0.3 per cent. Meanwhile, its blue-chip DAX 40 index rose by 18 per cent.
Passenger car sales in Germany fell by 27.8 per cent in August, with registrations of electric cars down by as much as 69 per cent.
Of all German car companies, only Volkswagen reported an increase in sales (4.2 per cent), while BMW, Mercedes-Benz and Porsche suffered declines.
Grzegorz Drozdz, market analyst at Conotoxia, warned that the decline in German manufacturing and its wider economy could lead to a correction for the index this year, especially with increasing competition from China.
Crude oil
While oil has had a bumpy ride in recent months, markets are starting to worry that oversupply concerns may cause the commodity’s price to crash.
“OPEC’s efforts to boost production face headwinds, with weaker demand from China, the world’s largest importer, weighing on prices,” explained Matt Britzman, senior equity researcher at Hargreaves Lansdown:
“Adding fuel to the fire, President-elect Trump’s proposed tariffs and sanctions could shake the energy market,” he added.
In addition, Trump’s plans to drastically ramp up American oil production could further lower the price.
Intel
While Intel was once considered a leader in the semiconductor industry, it is now outclassed by competitors like Nvidia, AMD and TSMC.
Intel has mounted an ambitious turnaround plan to catch up, investing heavily to improve growth.
However, this investment has yet to yield the desired results. The company recorded a loss of $16.6bn in the third quarter – around 20 per cent of its total market capitalisation – as sales fell six per cent.
If the company continues to struggle with growth in 2025, Intel could once again disappoint investors in 2025.
“Rising operating costs will mean that many investors may be disappointed with the company’s performance in 2025,” said Conotoxia’s Drozdz.