Shares of Tesla (NASDAQ:TSLA) were pummeled on Monday. The stock closed the trading day down about 8.6%
The automaker’s stock decline was likely primarily due to a pullback in the overall market on Monday. Many growth stocks like Tesla were hit particularly hard.
Volatility should be expected from Tesla stock. It soared 743% last year as it won over Wall Street’s attention. Tesla’s sales jumped, and the company demonstrated strong profits. Also likely helping the stock price last year was a big year for growth stocks in general. Many such stocks soared 50% or more in 2020.
But growth stocks were taking a breather on Monday as the Nasdaq Composite fell 2.5%.
Most of Tesla’s gains this year have evaporated. Shares are now up just 1.5% in 2021.
Tesla’s underlying business will likely continue to grow rapidly this year. Indeed, management guided for vehicle deliveries to increase from about 500,000 in 2020 to more than 750,000 this year.
But with a very optimistic business view already priced into Tesla shares, it’s difficult to predict where the stock could end up at the end of 2021.
There’s one thing we can expect with near certainty: plenty more volatility.