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After experiencing a $40 drop in stock price yesterday, Tesla continued a slide on Wall Street during pre-market and early hours trading in Tuesday’s session. At the time of writing, TSLA shares were trading at around $649, down around 9.2% or around $65.
The Street attributes the drastic slide in tech stocks to jumps in Treasury yields, along with a strong showing from commodities over the past several trading days. Yesterday, commodities hit their highest prices in eight years, and tech stocks, and their investors, felt the heat.
The S&P 500 fell .78% following the decline on Monday. The index’s heavy hitters, like Tesla and Apple, contributed to the downfall, falling 7 and 1.5%, respectively.
“The prospect of a less dovish tone from central banks, sparked by rising inflation, is causing stock traders to reduce their exposure to equities, especially overbought sectors like tech,” ActivTrades analyst Pierre Veyret said, according to Reuters.
Tesla was one of the hottest stocks of 2020, surging 700% on the year of the COVID-19 pandemic. The company managed to release a new vehicle, unveil a new battery cell that will revolutionize its EV architecture, remained profitable through all four quarters, and recorded its largest delivery and production figures in its history last year. 2021 has not proven to be Tesla’s finest hour as the company’s slide in the market has caused the stock to reach price points that investors last saw before it joined the S&P 500 in late December.
However, investors will see the slip in price as an opportunity to load up on more shares of the electric automaker. This includes ARK Invest, a New York-based investment firm that has arguably been Tesla’s biggest bull in recent times. ARK loaded up on an additional 183,707 Tesla shares yesterday, accounting for an over $202.4 million investment.
The adoption of EVs worldwide has made Tesla a prime candidate to lead the transition to battery-powered passenger transport. Analysts across Wall Street have posted price targets that indicate future stock surges. Many analysts revised their outlooks to prices well over $1,000 per share for Tesla. Many of these price target increases occurred after the Q4 2020 Earnings Call in January, where Tesla reported its fifth consecutive quarter of profitability and detailed its plans to open both Giga Texas and Giga Berlin, two new production facilities, later this year.
Disclosure: Joey Klender is a TSLA Shareholder.