What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) fell 3.3% in the morning session after Bank of America analyst John Murphy downgraded the stock's rating from Buy to Hold, citing "execution risk." Some of the areas of concern include "1) Introduction of a low cost model in [first half of 2025] and another new model in [second half of 2025] (key drivers of volume growth); 2) Launch of robotaxi in mid-2025; 3) Megapack production ramp at Shanghai assembly plant starting in 1Q:25; 4) Updates on [full self-driving] subscribers."
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What The Market Is Telling Us
Tesla’s shares are extremely volatile and have had 110 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 5.1% on the news that the company reported underwhelming vehicle deliveries for Q4 2024. Total deliveries were 495,570 for Q4 2024, falling short of the consensus estimate of just under 507,000. Results for the quarter show the first annual drop in delivery numbers for the company, which reported 1.80 million deliveries in 2024 and 1.81 million deliveries in 2023.
Tesla is up 3.8% since the beginning of the year, but at $393.79 per share, it is still trading 17.9% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $12,593.
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