Key Points
Tesla stock fell 1.4% to $403.13 in early trading. The S&P 500 and Dow declined too.
Investors are anticipating Nvidia’s earnings report, with Wall Street expecting third-quarter sales of $54.8 billion.
The market has become dominated by AI-driven tech companies.
Retailing stocks are now valued at 6% of what the market is saying Magnificent Seven are worth.Tesla TSLA stock was down, along with the market, early Tuesday. It’s starting to feel as if everyone is waiting for Nvidia’s NVDA earnings on Wednesday, not least the electric-vehicle maker’s CEO Elon Musk. Shares dropped 1.9% to $401.25 on Tuesday, while the S&P 500 SPX and Dow Jones Industrial Average DJIA
fell 0.8% and 1.1%, respectively.
Still, that is a relatively small move for Tesla stock. Shares have moved an average of about 3%, up or down, over the past month, including six days of moves bigger than 4%.
Nvidia shares fell closing at $181.36.
The chip maker has had explosive growth by powering the AI computing that is turning Tesla, like other Magnificent Seven companies, into an AI investment. Tesla, driven by Musk, is using AI to train cars to drive themselves and humanoid robots to complete practical tasks.
“It’s a market dominated by tech and the AI craze,” wrote Citi retailing analyst Steven Zaccone in a Tuesday report.
He doesn’t cover Tesla or Nvidia stocks. But he compared the value of the shares he covers with the value of the Mag 7. Retailing stocks are worth about 6% of the AI septet, down from 14% in 2022, more evidence of how the market has become dominated by Nvidia and its peers.
It’s also why everyone, including Tesla investors, needs to pay attention to what Nvidia and CEO Jensen Huang say on Wednesday. That earnings report will determine the direction of the entire market into the end of the year.
Coming into Tuesday trading, Tesla stock was up 1% so far this year and 21% over the past 12 months.
