As Tesla Inc (NASDAQ:TSLA) struggles with plummeting stock prices, investors are questioning its place among the “Magnificent Seven” tech stocks that have been driving the S&P 500 Index to new heights.
What Happened: Tesla, once a key player in the Magnificent Seven, is now grappling with a significant drop in its stock price. The company’s shares have fallen by 22% in 2024, in stark contrast to the soaring stock prices of other Magnificent Seven members such as NVIDIA Corp (NASDAQ:NVDA) and Meta Platforms Inc (NASDAQ:META).
While six of the seven companies are thriving due to the growing artificial intelligence (AI) sector, Tesla’s unique challenges are becoming increasingly apparent. Despite Elon Musk‘s efforts to position Tesla as an AI investment, the company is facing a slowdown in electric vehicle (EV) demand, which is casting doubt on its ability to maintain its rapid growth.
"Although Elon Musk would probably disagree, investors don't see Tesla as an AI play like most of the other Magnificent Seven stocks," said Matthew Maley, chief market strategist at Miller Tabak + Co., reported Bloomberg.
"We have a much different backdrop for Tesla and the others in the Mag Seven — the demand trend for Tesla products is fading, while it's exploding higher for those companies that are more associated with AI."
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