A Tesla Cybertruck parked outside a dealership on November 14, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Tesla The stock fell more than 8% on Wednesday, posting its sharpest decline since then by Donald Trump won the election last month, sending stocks surging.
Tesla closed at $440.13 and is still up 75% since Election Day on November 5. Last week, the stock rose to its highest level take notesurpassing the previous high reached in 2021. Before Wednesday’s drop, it had continued to rise, reaching a closing high of $479.86 on Tuesday.
“Most investors we spoke to were stunned by the magnitude of the rally and increasingly confused about how to handle the stock as a result,” Barclays analysts wrote in a note Wednesday. it doesn’t seem to have much to do with fundamentals.” They have a hold rating on the stock and a $270 price target.
The pullback coincides with one steep slope on the broader market, including Nasdaq’s 3.6% decline, the second-worst day of the year for the tech-heavy index.
Tesla is coming off a 38% gain in November, its best monthly performance since January 2023 and the 10th best on record. CEO Elon Musk according to Federal Election Commission records, is a major supporter of Trump, mainly pouring $277 million into his election effort.
Now, Musk, the world’s richest person, will lead the Trump administration’s “Department of Government Effectiveness,” which is expected to function as an advisory office, alongside presidential candidate One Vivek Ramaswamy’s Republican era.
His new role could give Musk, who also runs SpaceX and owns social media company inconvenient regulations. Musk said on Tesla’s earnings call in October that he planned to use his influence with Trump to establish a “federal approval process for autonomous vehicles.”
While Tesla has yet to produce robotaxis or operate driverless ride-hailing services, its major domestic rival Waymo said Wednesday it will take more than 4 million paid robotaxi trips by 2024 when it opens expand the scale of commercial activities in the US.
“Tesla is Elon Musk’s only company that is publicly traded, and it is often considered to represent an investment in Musk himself,” Barclays analysts wrote. “In our view, this value has understandably increased, but this further exacerbates the already high key person risk for Tesla stock.”
On Wednesday, one Quinnipiac Poll found that 53% of voters in the US disapproved of Musk “playing a prominent role in the Trump administration”. The divide is wide across partisan and gender lines — just 31% of women surveyed said they approved of Musk taking on a major role in the next administration, and just 5% of Democrats approved.
Musk also has it complain In recent days, the SEC issued a “demand for payment” tied to his sale of Tesla shares in 2022 as he pursued the purchase of Twitter, now known as X.
An SEC spokesperson declined to discuss the matter, telling CNBC that the agency conducts investigations “on a confidential basis to protect the integrity of its investigative process.”
Tesla is expected to report fourth-quarter and year-end vehicle deliveries in January. No significant new vehicles have been added to its lineup since Cybertruck deliveries began in January. In November 2023, Tesla attempted to boost its electric vehicle sales with a series of incentives, such as 0% financing.
CLOCK: The analyst explains why Tesla’s upward momentum remains unstoppable
