Tesla Shares Tumble 12% as Musk Predicts Slower Growth
Quiver Quantitative — Tesla (NASDAQ:TSLA) experienced a significant drop in its stock value, nearly 11%, following CEO Elon Musk's announcement of slower sales growth and a focus on developing a more affordable electric vehicle. This projected decrease in market capitalization, which could reach $70 billion, compounds an already challenging month for the automaker, with its valuation potentially shrinking by approximately $200 billion.
The ripple effect of Tesla's forecast was felt across the electric vehicle (EV) industry, with shares of Rivian (NASDAQ:RIVN), Lucid Group (NASDAQ:LCID), and Fisker (NYSE:FSR) also declining. The EV sector, already facing a demand slowdown, may experience intensified pressure from Tesla's aggressive pricing strategies.
Market Overview: -Tesla plummets on CEO Musk's projected sales slowdown, potentially erasing $50 billion in market value. -Ripples spread across the EV sector, with Rivian, Lucid, and Fisker taking hits. -Investor concerns mount about margin pressure and intensifying competition, particularly from BYD (SZ:002594) in China. -«Magnificent Seven» tech stocks, including Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), offer potentially safer havens amid Tesla's turmoil.
Key Points: -Musk's focus on a future electric vehicle overshadows disappointing near-term growth prospects, dampening investor sentiment. -Price cuts to boost sales raise profitability concerns, adding to the bearish narrative. -The broader EV industry braces for increased pressure due to Tesla's aggressive discounting strategy. -Tesla's high valuation becomes difficult to justify with dwindling growth and weakening margins.
Looking Ahead: -Wall Street adjusts its gears, potentially shifting focus towards tech
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