Why Tesla Inc. (TSLA) Stock Crashed On Monday

We recently published a list of 10 Stocks Defy Monday’s Market Optimism. In this article, we are going to take a look at where Tesla Inc. (NASDAQ:TSLA) stands against other stocks that defy Monday’s market optimism.

US shares kicked off Monday’s trading with a bounceback from last week’s pessimistic sentiment, as economies took a pause from their tariff war.

Additionally, investors breathed a sigh of relief on the February retail sales report which came in not as bad as feared.

According to the latest figures, retail sales rose 0.2 percent, albeit below the 0.6 percent as expected by analysts. Excluding autos, sales are up by 0.3 percent, in line with economists’ expectations.

Following the news, the Dow Jones clocked in a 0.85-percent gain, followed by the S&P 500 with 0.64 percent, and the tech-heavy Nasdaq with 0.31 percent.

Meanwhile, 10 companies bucked a wider optimistic sentiment over a flurry of negative corporate news that weighed down on their shares. In this article, we have listed Monday’s 10 worst performers and detailed the reasons behind their drop.

To come up with the list, we considered only the stocks with $2 billion market capitalization and $5 million in trading volume.

Tesla Inc. (NASDAQ:TSLA)

Shares of Tesla dropped by 4.79 percent on Monday to finish at $238.01 apiece following a downgraded stock rating from an investment firm.

In a note to its clients on Sunday, Mizuho analyst Vijay Rakesh said he lowered his price target for TSLA to $430 from $515 previously, as he expects a lower vehicle delivery forecast of 1.8 million from 2.3 million as expected prior.

Rakesh chalked up TSLA’s sales woes to weakening brand perception in the US and the European Union, as well as a “deterioration in geopolitics”, a cut-throat competition in China from domestic EV firms.

Meanwhile, TSLA was said to have partnered with Chinese firm Baidu to recalibrate its China strategy.

In addition, TSLA is also offering a free trial of Full Service-Driving autonomous software in China from March 17 to April 16.

TSLA has been struggling with self-driving issues in data collection in China amid the Chinese government’s data privacy laws which prevent the company from sending data collected to its servers in the US.

Overall, TSLA ranks 4th on our list of stocks that defy Monday’s market optimism. While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as TSLA but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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