What happened
Actions of Tesla (NASDAQ: TSLA) it fell sharply on Monday, extending a few weeks of low for the stock. It ended today almost 6% lower.
The shares of the electric car maker probably fell on Monday, mainly due to a weakness in the general market, especially among technology stocks.
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And
Reflecting the wave of technology stock sales on Monday, the high-tech market Nasdaq Compound fell 2.4% even with the S&P 500, which is more diversified in other sectors, fell just 0.5%. Many growth stocks, like Tesla, fell even more sharply than Nasdaq.
Monday’s market dynamics represented a continuation of a trend in the last few weeks of technology stocks pausing after a big upward run in 2020. Tesla’s shares have been hit particularly hard, falling more than 30% since mid-February. In the accumulated result for the year, it fell more than 20%.
What now
Investors should note that Tesla shares are still up about 300% in the past 12 months and 570% since the beginning of 2020. It is not very surprising, therefore, to see growth stocks falling.
Growth stocks are generally more volatile than the general market. Investors, therefore, should plan for more volatility in stocks like Tesla. On the other hand, shareholders must remain focused primarily on the company’s underlying businesses. On that note, management guided its year-over-year growth in vehicle delivery to accelerate this year compared to last year.
“We are planning to increase our manufacturing capacity as soon as possible,” Tesla said in his letter to shareholders in the fourth quarter. “Over a period of several years, we expect to achieve an average annual growth of 50% in vehicle deliveries. In some years, we can grow faster, which we expect to be the case in 2021.”
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