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What happened
Actions of You’re here (NASDAQ: TSLA) were hit hard on Wednesday. The stock fell 4.8% as the market closed.
The stock is likely down mainly due to a decline in the overall market which has particularly weighed on growth stocks like Tesla. However, stocks may also be down due to a rating of Morgan stanley analyst Adam Jonas on FordTesla’s new electric Mustang Mach-E takes market share in February.
Image source: Getty Images.
So what
Jonas estimates that Tesla’s market share in the electric vehicle market in the United States has increased from 81% in February 2020 to 69% in February 2021, largely due to the market share gains of the new Mustang Mach- E.
Still, that doesn’t mean Tesla’s electric vehicle sales are doing badly; The overall EV market grew 40% year-over-year over the period, Jonas estimates.
The main reason for the stock’s decline, however, is likely a drop in the overall market on Wednesday. The S&P 500 and Nasdaq Composite fell by 1.3% and 2.7% respectively. Many growth stocks like Tesla fell even more.
Now what
The drop in Tesla stock comes on top of a general downtrend for the stock in recent weeks. After stocks hit an all-time high of $ 900.40 earlier this year, the stock is now down 7% year-to-date, underperforming the S&P 500’s 2% decline.
Investors should expect more volatility from Tesla stocks, as growth stocks are typically much more volatile than the overall market.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
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