Tesla’s Stock Decline Erases $700 Billion in Gains Post-Trump Election

Tesla’s stock has plummeted, wiping out $700 billion in gains since Trump’s election. Shares fell over 28% in the past month due to sales declines, market conditions, and concerns about Musk’s focus. Analysts have downgraded price targets, while potential recovery may hinge on sales improvements or project updates amidst high valuations.

Tesla’s stock has experienced a significant decline, erasing $700 billion in gains accrued since Donald Trump’s election win. On Friday, shares dropped by 4.6%, ultimately resulting in a more than 28% decrease over the past month and a nearly 32% decline since the start of the year. Initially regarded as a top performer post-election, Tesla’s stock is now beleaguered by concerns over its core automotive business and CEO Elon Musk’s political engagements.

The downturn follows a January report indicating Tesla’s first quarterly sales decline in a decade, signaling a loss of market dominance in Europe and China. Investor apprehension has intensified due to fears that Musk’s focus on political matters might detract from his leadership at Tesla. “The bet on Tesla’s shares soaring due to Musk’s political involvement has not worked out thus far,” remarked Adam Sarhan, highlighting the shift in investor sentiment.

Challenging macroeconomic conditions have also affected Tesla’s performance, with concerns over U.S. trade policies and economic growth contributing to reduced market enthusiasm. The S&P 500 has declined over 7% and the Nasdaq 100 is in correction, compounding Tesla’s woes. Furthermore, Bank of America analyst John Murphy has downgraded Tesla’s price target from $490 to $380, citing concerns about sluggish sales and the lack of updates on future vehicle models.

Despite the recent downturn, Tesla stock has entered what analysts term an “oversold” zone, indicating potential for a short-term recovery. Possible positive catalysts could include improved sales data or updates about the robotaxi initiative, although concerns about Tesla’s high valuation remain. The company’s forward price-to-earnings ratio stands at 88, markedly higher than the S&P 500’s ratio of 21. “So, the shares are still very expensive,” noted Matt Maley, emphasizing the ongoing valuation concerns.

Tesla’s stock has faced a significant decline, driven by disappointing sales reports and concerns regarding CEO Elon Musk’s political activities impacting focus. Investors remain cautious as Tesla navigates a challenging macroeconomic environment and high valuations. While there may be potential for recovery, the lingering volatility and uncertainties pose risks to the stock’s future performance.

Original Source: nypost.com