There Is Nothing “Magnificent” About Tesla This Year, Stock Down 36% YTD

There is Nothing “Magnificent” About Tesla this Year, Stock Down 36% YTD

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Among the ‘Magnificent Seven‘ stocks, Tesla (Nasdaq: TSLA) has emerged as the worst performer year-to-date, with a staggering 36% decline in its stock price.

The electric vehicle manufacturer has faced various challenges, including production setbacks, executive turnover, and declining sales, particularly in the crucial Chinese market. A significant layoff affecting more than 10% of its workforce has further compounded the company’s struggles.

Tesla Performance Diverges Significantly from the Other 6 “Magnificent Seven” this Year

Tesla’s poor stock performance starkly contrasts with the other tech giants in the group. While companies like Nvidia (NVDA) and Meta Platforms (META) have seen impressive growth of 80.64% and 45.17%, respectively, and others such as Google (GOOG), Amazon (AMZN), and Microsoft (MSFT) have maintained relatively stable performances, Tesla’s decline has been significant and problematic for investors.

The company’s difficulties can be attributed to several factors. Tesla’s Q1 2024 vehicle deliveries fell short of market expectations, and operational setbacks, including disruptions at the Gigafactory Berlin due to arson and the early phase of the production ramp-up for the updated Model 3, have hindered production capabilities.

Additionally, the announced layoffs, affecting approximately 14,000 employees, have raised concerns about the company’s financial health and future prospects.

Tesla Faces Intense Competition in the EV Market

Furthermore, Tesla faces intensifying competition in the electric vehicle market, particularly in China, where local manufacturers are gaining market share.

This increased competition has put additional pressure on Tesla’s sales and market dominance. The company’s financial results and projections have failed to meet analyst expectations, leading to downward revisions of stock price targets and growing investor skepticism about future profitability.

Negative reactions to Tesla’s operational and financial updates in the stock market have led to significant stock price declines, reflecting investor concerns over the company’s short-term challenges and long-term viability. External factors, such as regulatory challenges and macroeconomic conditions, including trade tensions and supply chain issues, further complicate Tesla’s operational environment. Delays and uncertainties around new product launches and technological advancements, like Autopilot and Battery Tech, have also contributed to investor hesitations, making it clear that there is nothing magnificent about Tesla’s performance this year.

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Disclosure: None.

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Seeking Alpha Reader 1 month ago Member's comment

Self driving is too dangerous to humanity and is not going to translate into robo taxis, which is the latest shill. Most people don’t have anywhere to charge these things and the range anxiety is what keeps people from buying, not to mention the slave labor in those cobalt mines. Forget it. I'm bearish on $TSLA.

Mike Faragut 1 month ago Member's comment

Look at how far AI has come in the past couple years.  Do you really think there won't come a point where AI makes a better driver than humans?  We are not there yet but that day is coming and quickly.