The Direxion Daily TSLA Bull 2X Shares (TSLL) experienced a sharp pre-market decline of 5.12% on Monday.
The movement appears linked to growing analyst concerns following Tesla's announcement of its ambitious "Terafab" chip factory project. Reports highlight significant skepticism regarding the project's staggering estimated capital expenditure, which analysts from Barclays and Bank of America place between $20 billion to over $60 billion. Furthermore, Tesla lacks large-scale semiconductor manufacturing experience, and the project faces a lengthy timeline with volume production not expected until 2029 at the earliest.
Analysts caution that such a massive, high-risk investment could strain Tesla's finances, with Bank of America noting that even under ideal assumptions, the project's potential wafer costs could remain higher than those of established foundries like TSMC, making investment returns difficult to justify. This skepticism over the feasibility and economic rationale of the Terafab project is weighing on the leveraged bullish ETF tied to Tesla's stock.
