Daily Stock Market News

Why Tesla Stock Fell on Wednesday

What happened

Shares of electric car maker Tesla (NASDAQ:TSLA) took a hit on Wednesday. As of 11:35 a.m. ET, the stock is down about 3%.

The stock’s slide was likely primarily due to a rough day for the overall market. After broader-market indices kicked off the day on a positive note, with the S&P 500 and the Nasdaq Composite both in the green, the indices slid into the red by midmorning.

Tesla vehicles at an electric charging station.

Image source: Tesla.

So what

In a tough start to 2022, many growth tech stocks like Tesla have been getting hammered, as pessimism seems to be the winning emotion in the markets so far this year. The stock is down 5.3% year to date — and that includes when the stock popped sharply earlier this year after the company announced blowout fourth-quarter vehicle deliveries.

The stock’s decline on Wednesday is likely simply a continuation of further pressure on growth tech stocks, as investors seem to be taking profits on some of the stocks that outperformed the market meaningfully over the last few years.

Now what

Looking ahead, investors are likely eyeing Tesla’s upcoming fourth-quarter earnings report. Though the company has already reported fourth-quarter deliveries, the report had limited information. When Tesla reports its fourth-quarter results on Jan. 26, investors will get more information.

One key item many investors will likely be watching when Tesla reports its fourth-quarter results is management’s guidance for 2022 vehicle deliveries. Investors should hope that the company guides for another year of 50%-plus growth in vehicle sales in order to continue justifying the stock’s pricey valuation.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Read More: Why Tesla Stock Fell on Wednesday

You might also like
A note to our visitors

This website has updated its privacy policy in compliance with changes to European Union data protection law, for all members globally. We’ve also updated our Privacy Policy to give you more information about your rights and responsibilities with respect to your privacy and personal information. Please read this to review the updates about which cookies we use and what information we collect on our site. By continuing to use this site, you are agreeing to our updated privacy policy.