According to foreign news reports, although automakers have slashed prices and provided incentives to persuade consumers, the demand for electric vehicles will continue to decline in 2024.
Elon Musk's Tesla – by some metrics, known for selling the most popular electric cars on the market – is facing new skepticism from analysts and investors.
For example, Morgan Stanley analyst Adam Jonas openly questioned: Will Tesla lose money this year (at some point)?
Jonah lowered Tesla's price target to $320 from $345 and noted some concerns about the EV market.
It's worth noting that Tesla's share price has been more than 13% since Friday and has been steady for the past three consecutive days. In Thursday's pre-market trading, the stock has **nearly 2%. In addition, the Austin, Texas-based company is no longer one of the top 10 largest companies in the U.S. by market capitalization, trailing Visa in market capitalization on Wednesday.
This is the first time in more than a year that Tesla has been overtaken by the digital payments company.
Tesla is expected to lose hundreds of millions of dollars in the past week after it was hit by a far-left group near the Berlin Brandenburg Gigafactory in Grünheide, Germany, and the electric car maker posted record monthly sales.
The company has also been embroiled in the war in China, with rival electric car maker BYD unveiling a range of cheaper cars and slashing price cuts. Tesla and several other companies, including SAIC-GM-Wuling, a joint venture backed by Hyundai Motor and General Motors, have also retaliated by cutting prices or increasing incentives.
After Tesla fell out of the top 10 companies by market capitalization, American investors directly expressed their views on Rest in Peace, Tesla. Here's the analysis:
This should be the end of the discussion of the Tech Seven.
Many are revising the abbreviations for the top tech stocks in the market, with some removing Tesla due to its poor performance, leading to calls for the Spectacular Six , or if someone removes Alphabet, Google, Five Tigers .
In fact, this view seems plausible considering Tesla**'s recent performance over most recent timeframes.
With Tesla recently falling out of the list of the top 1 companies by market capitalization in the S&P 500, this narrative continues to ferment. Tesla is significantly underperforming compared to its larger peers, and Tesla's investors seem to be paying more attention to the issue. Jumping ship to other ambitious tech companies, notably Nvidia NVDA, broke through $900 per share today, hitting an all-time high.
So, does this mean that Tesla is resting in peace, or should investors take advantage of the dips**? Let's dive into the significance of this move.
Rest in peace Tesla**: It's no longer a top 10 tech stock.
Tesla's fundamental performance last quarter has undoubtedly caused widespread concern among existing investors. Analysts such as Morgan Stanley have downgraded the EV maker's earnings due to continued price cuts and weak demand in the EV space**.
Of course, Tesla is more than just a car company, and most analysts' price targets are still well above the stock's current trading**. Tesla could certainly benefit from the broader long-term trend in artificial intelligence and robotics. But there are many other companies with better growth fundamentals and higher profit margins to consider. In a world of intensified competition for capital, Tesla** is relatively less attractive.
I think that's the key argument that has led to Tesla's poor performance this year. In fact, the TSLA share price has been over 25% year-to-date, which means that momentum investors are less likely to demand and speculate on call options (money is clearly flowing to companies like NVIDIA right now). As a result, it's hard to foresee what kind of catalysts could propel Tesla higher at the moment, especially if the upcoming earnings report is weaker-than-expected.