A Tesla Cybertruck is parked outside the dealership on November 14, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Tesla Shares fell more than 8% on Wednesday, marking their biggest drop since previously Donald Trump Winning the election last month, sparking a sharp rise in stocks.
Tesla closed at $440.13, still up 75% since Election Day on November 5. Last week, the stock rose to… registersurpassing the previous high reached in 2021. Before Wednesday's decline, it continued to rise, hitting a closing high of $479.86 on Tuesday.
“Most investors we spoke to were stunned by the size of the rise, and increasingly confused about how to approach the stock given how disconnected it is from fundamentals,” Barclays analysts wrote in a report on Wednesday. They have the equivalent of a Hold rating on the stock and a price target of $270.
The decline coincided with a Sharp decline in the broader market, including a 3.6% drop in the Nasdaq, the second-worst day of the year for the tech-heavy index.
Tesla is coming off a 38% rally in November, its best monthly performance since January 2023 and the 10th best on record. CEO Elon Musk He was a major supporter of Trump, pouring $277 million primarily into his campaign efforts, according to Federal Election Commission filings.
Now Musk, the world's richest person, is set to lead the Trump administration's Government Efficiency Administration, which is expected to function as an advisory office, alongside Republican presidential candidate Vivek Ramaswamy.
His new role could give Musk, who also runs SpaceX and owns the social media company During a Tesla earnings call in October, Musk said he planned to use his influence with Trump to create a “federal approval process for self-driving vehicles.”
While Tesla still does not produce robotaxis or operate driverless ride-hailing services, its main domestic rival Waymo said on Wednesday that it has made more than 4 million paid taxi trips in 2024 as it expands its commercial operations in the United States.
“Tesla is Elon Musk’s only publicly traded company, and has often served as a proxy for investment in Musk himself,” Barclays analysts wrote. “That value has understandably increased, but this further exacerbates the already high key man risk in Tesla shares, in our view.”
On Wednesday, A Quinnipiac poll It found that 53% of US voters disapprove of “Musk playing a prominent role in the Trump administration.” The divide was huge across party and gender lines, with only 31% of women surveyed saying they approved of Musk taking a major role in the next administration, and just 5% of Democrats agreed.
Musk has it too He complained In recent days, the SEC issued a “settlement order” tied to his sale of Tesla stock in 2022 as he sought to buy 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 maintain the integrity of its investigative process.”
Tesla is scheduled to announce its vehicle deliveries for the fourth quarter and the end of the year in January. Without adding a major new vehicle to its lineup since Cybertruck deliveries began in November 2023, Tesla has been working to ramp up sales of its electric vehicles through a range of incentives, such as 0% financing.
He watches: The analyst explains why Tesla's momentum remains unstoppable
