Shares of Tesla slipped Tuesday as part of a broader cooling off among the hottest trades following last week’s election of Donald Trump, though the Elon Musk-led electric vehicle maker remains far more valuable than it was prior to Election Day.
People look at a Cybertruck at a Tesla dealership in Manhattan.
Tesla stock fell 3% by 10 a.m. EST, on pace for its first daily loss since last Monday.
That pares Tesla’s post-election gain to a still eye-popping 35%, as investors flooded into the stock following Trump’s victory on optimism about what Musk’s close alliance with Trump would mean for Tesla.
Accompanying Tesla’s slip Tuesday were losses for some other assets which rallied after the Trump win.
The world’s largest digital asset Bitcoin fell 2%, the stock of Axon Enterprise, the Taser stun gun parent which was the only S&P 500 company to outperform Tesla from Election Day through Monday, lost 3%, private prison companies CoreCivic and Geo Group sank about 4% apiece and analytics-focused defense contractor Palantir slipped 2%.
Major indexes were flat, with the S&P and the tech-heavy Nasdaq both up less than 0.1%.
“The magnitude” of Tesla stock’s post-election surge “surprised us,” Deutsche Bank analysts led by Edison Yu remarked in a Tuesday note to clients.
Musk’s net worth fell by about $5 billion Tuesday as Tesla shares fell. His $315 billion net worth is still more than $80 billion higher than the next-wealthiest person in the world, Oracle chairman Larry Ellison, while Musk is still almost $50 billion richer than he was before the election.
Tesla added more than $340 billion in market value in the week ending Monday, eclipsing a $1 trillion market capitalization for the first time since April 2022 in the process. Yu outlined several near-term factors behind the surge, including “retail exuberance” and short trade unwinding “due to lack of near-term negative catalysts.” But Yu wrote there are “potential large” benefits for Tesla under a Trump regime with Musk a close advisor, including “streamlining” regulatory approval of Tesla’s self-driving cars and the potential for Tesla to secure further market share in the U.S. with the potential cutback of federal tax credits for electric vehicles. Tesla stock led a broader rally for U.S. equities since the election, with the S&P up 4% over the last week, trading above 6,000 for the first time ever as Wall Street celebrated the positive earnings impact of the lower corporate tax rates backed by Trump.