Why Magna International Inc. (MGA) Crashed on Monday

We recently compiled a list of the The 10 Worst-Performing Stocks on Monday. In this article, we are going to take a look at where Magna International Inc. (NYSE:MGA) stands against the other stocks.

Ten companies kicked off this week’s trading with significant losses, mirroring a wider market pessimism over growing trade tensions.

The declines came following the US imposition of additional tariffs on goods from Canada, Mexico, and China, and signals of potential retaliation of taxes on US goods.

On Monday, the Dow Jones lost another 0.28 percent, while the S&P 500 and the Nasdaq Composite both registered steep declines of 0.76 percent and 1.20 percent, respectively. The slump came following President Donald Trump’s announcements that he would slap a 25-percent tariff on Canadian and Mexican goods, while a special 60-percent rate would be taxed on Chinese products.

Our list of Monday’s top losers only considered the companies with at least $2 billion in market capitalization and $5 million in daily trading volume.

An assembly line of light trucks in a state-of-the-art manufacturing plant.

Magna International Inc. (NYSE:MGA)

Magna International Inc. (NYSE:MGA) dropped its share prices by 6.35 percent on Monday to finish at $37.15 each as investor sentiment was dragged down by the US imposition of tariffs on Canadian goods.

Magna International, a leading Canadian automotive parts manufacturer, faces significant risks from potential tariffs, at a time when it just launched a new manufacturing facility in Maharashtra, India.

Spanning nearly 6,000 square meters, the new facility will produce advanced latches and mirrors for automotive applications. Additionally, the new site reportedly will create 300 jobs over the next three years.

According to its financial reports, Mexico, Canada, and China—three countries now grappling with the recent US tariff hikes—represent some of Magna’s most significant end markets outside of the United States. The said regions are critical to Magna’s global supply chain and revenue, making the impact of tariffs particularly concerning for the company.

In 2023, the three markets were said to have contributed 34 percent of its total sales.

Overall MGA ranks 7th on our list list of the worst performing stocks on Monday. While we acknowledge the potential of MGA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MGA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.