Tesla’s stock continued its weeks-long nosedive on Friday as Elon Musk’s electric vehicle maker erased $700 billion in gains that had gathered because the US presidential election.
Tesla’s shares had dropped by as much as 4.6% on Friday morning before recovering somewhat within the afternoon session — positioning them to wipe out the $700 billion surge they’d enjoyed post-election.
Tesla’s stock has fallen by greater than 28% within the last month. Since Jan. 1, the stock is down nearly 32%.
Following Donald Trump’s resounding victory on Nov. 5, Tesla became certainly one of the market’s top performers, fueled by expectations that CEO Musk’s close ties to the president would profit the electrical vehicle manufacturer.
Nonetheless, those initial hopes have been overshadowed by mounting concerns over the corporate’s core business — selling cars.
This latest dip follows a series of setbacks which have rattled investor confidence.
A January report revealed that Tesla’s quarterly sales had fallen for the primary time in a decade while recent data indicates that the automaker is losing its dominance in key markets like Europe and China.
Moreover, some investors fear that Musk’s increasing involvement in politics is diverting his focus from leading the corporate.
“The bet on Tesla’s shares soaring resulting from Musk’s political involvement has not worked out to date,” Adam Sarhan, founding father of 50 Park Investments, told Bloomberg News.
“Investors who initially anticipated massive advantages from Musk’s political involvement got too excited, and now cooler heads are prevailing.”
Tesla’s struggles are compounded by a difficult macroeconomic environment.
The speculative fervor that drove stocks to record highs after the election has waned amid concerns about US trade policy and economic growth.
The S&P 500 has fallen greater than 7% from its peak, while the Nasdaq 100 has entered correction territory.
Adding to Tesla’s woes, Bank of America analyst John Murphy downgraded his price goal for the stock on Tuesday, cutting it from $490 to $380.
Murphy cited concerns over sluggish recent automotive sales, the absence of updates on an inexpensive vehicle, and uncertainty surrounding Tesla’s robotaxi initiative.
That said, Tesla’s recent downturn has brought its stock into what technical analysts discuss with as an “oversold” zone, potentially setting the stage for a short-term rebound.
Possible catalysts for a recovery could include improving sales figures, an organization update on its robotaxi efforts or a broader resurgence in investor appetite for riskier equities.
Still, any potential rally would need to contend with lingering concerns about Tesla’s valuation.
The corporate’s forward price-to-earnings ratio stays elevated at 88, significantly higher than the S&P 500’s multiple of 21.
“Tesla’s forward price-to-earnings ratio (a valuation metric that compares an organization’s current stock price to its expected future earnings per share) continues to be very near 90,” Matt Maley, chief market strategist at Miller Tabak + Co., told Bloomberg News.
“So, the shares are still very expensive.”
As Tesla navigates an increasingly uncertain landscape, investors are weighing whether the recent selloff represents a buying opportunity or a warning sign of deeper challenges ahead.
Tesla’s stock continued its weeks-long nosedive on Friday as Elon Musk’s electric vehicle maker erased $700 billion in gains that had gathered because the US presidential election.
Tesla’s shares had dropped by as much as 4.6% on Friday morning before recovering somewhat within the afternoon session — positioning them to wipe out the $700 billion surge they’d enjoyed post-election.
Tesla’s stock has fallen by greater than 28% within the last month. Since Jan. 1, the stock is down nearly 32%.
Following Donald Trump’s resounding victory on Nov. 5, Tesla became certainly one of the market’s top performers, fueled by expectations that CEO Musk’s close ties to the president would profit the electrical vehicle manufacturer.
Nonetheless, those initial hopes have been overshadowed by mounting concerns over the corporate’s core business — selling cars.
This latest dip follows a series of setbacks which have rattled investor confidence.
A January report revealed that Tesla’s quarterly sales had fallen for the primary time in a decade while recent data indicates that the automaker is losing its dominance in key markets like Europe and China.
Moreover, some investors fear that Musk’s increasing involvement in politics is diverting his focus from leading the corporate.
“The bet on Tesla’s shares soaring resulting from Musk’s political involvement has not worked out to date,” Adam Sarhan, founding father of 50 Park Investments, told Bloomberg News.
“Investors who initially anticipated massive advantages from Musk’s political involvement got too excited, and now cooler heads are prevailing.”
Tesla’s struggles are compounded by a difficult macroeconomic environment.
The speculative fervor that drove stocks to record highs after the election has waned amid concerns about US trade policy and economic growth.
The S&P 500 has fallen greater than 7% from its peak, while the Nasdaq 100 has entered correction territory.
Adding to Tesla’s woes, Bank of America analyst John Murphy downgraded his price goal for the stock on Tuesday, cutting it from $490 to $380.
Murphy cited concerns over sluggish recent automotive sales, the absence of updates on an inexpensive vehicle, and uncertainty surrounding Tesla’s robotaxi initiative.
That said, Tesla’s recent downturn has brought its stock into what technical analysts discuss with as an “oversold” zone, potentially setting the stage for a short-term rebound.
Possible catalysts for a recovery could include improving sales figures, an organization update on its robotaxi efforts or a broader resurgence in investor appetite for riskier equities.
Still, any potential rally would need to contend with lingering concerns about Tesla’s valuation.
The corporate’s forward price-to-earnings ratio stays elevated at 88, significantly higher than the S&P 500’s multiple of 21.
“Tesla’s forward price-to-earnings ratio (a valuation metric that compares an organization’s current stock price to its expected future earnings per share) continues to be very near 90,” Matt Maley, chief market strategist at Miller Tabak + Co., told Bloomberg News.
“So, the shares are still very expensive.”
As Tesla navigates an increasingly uncertain landscape, investors are weighing whether the recent selloff represents a buying opportunity or a warning sign of deeper challenges ahead.
