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Tesla Is the Only Loser in the Magnificent 7 So Far This Year

Published 26/01/2024, 05:59 am
Updated 07/04/2022, 06:55 pm
Shares of Tesla tumbled 8.8% in premarket trading after the automaker released disappointing Q4 results and 2024 outlook.

Tesla reported its Q4 results on Wednesday, disappointing investors with worse-than-expected results and a pessimistic 2024 outlook. As predicted by Wall Street analysts, recent challenges have significantly weighed on the carmaker’s stock price, leaving it the only stock in the “Magnificient Seven” to be down YTD, dropping over 16% since the year started.

Tesla’s 2024 Outlook Warnings Trigger Sell-Off

Tesla’s shares dipped 8.8% in premarket trading Thursday after the electric vehicle (EV) giant’s Q4 results missed Wall Street’s estimates and pointed to a gloomy 2024 outlook.

The carmaker led by Elon Musk posted Q4 adjusted earnings per share (EPS) of 71 cents, missing the consensus estimates of 74 cents estimated by LSEG. Quarterly net income surged, doubling to $7.9 billion ($2.27 per share) from the previous year’s $3.7 billion ($1.07 per share), mainly fueled by a one-time noncash tax benefit of $5.9 billion.

Tesla generated $25.17 billion in revenue during the quarter, below the analysts’ expectations of $25.6 billion. Year-over-year, revenue rose by 3%.

Tesla’s automotive revenue, a metric closely watched by analysts and investors, reached $21.6 billion in Q4, marking a year-over-year increase of just 1%. Operating margin stood at 8.2%, down significantly from the 16% reported in the year-ago period and slightly above the 7.6% in the previous quarter.

However, the company’s outlook has likely been the biggest concern to investors. Tesla said vehicle volume growth “may be notably lower” in 2024 compared to last year as it strives to roll out its next-generation vehicle in Texas. The company is currently caught “between two major growth waves,” it said.

Last year, Tesla delivered 1.8 million cars and has implemented a series of price cuts globally, especially in Europe and China. The reductions negatively affected the company’s profit margins, prompting multiple Wall Street firms to lower their price targets on EV maker’s stock.

Magnificent Seven Continue Their March, Leaving Tesla Behind

Beyond Tesla, the other leading tech stocks in the Magnificent Seven, which played a significant role in last year’s stock market dominance, have sustained and extended their momentum in 2024. This group has propelled the S&P 500 to reach record highs for the first time in two years as investors continue to channel funds into the tech sector.

Once again, chip giant Nvidia is spearheading the charge, having gained more than 24% since the start of the year. Facebook owner Meta platforms climbed more than 11% during that period, while Microsoft and Google advanced about 7.7%.

After a tough start to the year, Apple is up around 4% year-to-date, similar to what Amazon gained. Meanwhile, Tesla is the only laggard from the Magnificent Seven stocks, plunging nearly 17% since January 1.


Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.

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