Why Tesla Stock fell further on Monday

What happened

Actions of You’re here (NASDAQ: TSLA) slipped sharply on Monday, extending a few bearish weeks for the title. He finished almost 6% lower today.

Shares of the electric carmaker were likely lower on Monday mainly due to weakness in the market as a whole, especially among tech stocks.

So what

Reflecting Monday’s tech stock selloff, the Nasdaq composite fell by 2.4% even as S&P 500, which is better diversified in other sectors, fell only 0.5%. Many growth stocks like Tesla fell even more sharply than the Nasdaq.

Monday’s market momentum represented a continuation of the trend of recent weeks where tech stocks took a break after rising sharply in 2020. Tesla stock was particularly hard hit, down more than 30% since mid -February. Since the start of the year, it is now down more than 20%.

Now what

Investors should note that Tesla stock is still up around 300% in the past 12 months and 570% since the start of 2020. So it’s not too surprising to see the growth stock retreat.

Growth stocks are generally more volatile than the overall market. Investors should therefore expect more volatility in stocks like Tesla. On the other hand, shareholders must remain primarily focused on the underlying business of the company. On that note, management has guided year-over-year vehicle delivery growth to accelerate this year compared to last year.

“We plan to increase our manufacturing capacity as quickly as possible,” Tesla said in its fourth quarter letter to shareholders. “Over a multi-year horizon, we expect to achieve an average annual growth of 50% in vehicle deliveries. In some years we may grow faster, which we expect to be in 2021. ”