Retail investors flock to Tesla as stocks remain under pressure

Individual investors flocked to Tesla (TSLA) on Tuesday, seeing the EV giant’s recent decline in shares as a bearish buying opportunity for their favorite stocks.

Tesla was the most popular buy among retail traders in Tuesday’s session, according to data from VandaTrack, even as the company missed out on a rally across broader indices following a lighter-than-expected inflation report.

Shares of Tesla fell 4.1% on Tuesday to close around $161, while the S&P 500, Dow and Nasdaq all finished higher. The losses continued into Wednesday, with the stock down about 1% near 1 PM ET.

The company has had a brutal start to December, with shares down 17% so far this month and more than 50% year-to-date.

Despite the dips, Tesla’s net retail buyings reached $610 million in the five trading sessions that concluded on Tuesday, according to VandaTrack’s analysis of individual investor trends.

In the same five-day period, Apple (AAPL), Amazon (AMZN), NVIDIA (NVDA) and AMD (AMD) trailed Tesla in popularity, with net retail inflows of $210 million and $188 million, $147 million and $90 million, respectively.

Retail investors flocked to Tesla on Tuesday as the stock significantly underperformed the broader market.  (Source: VandaTrack)

Retail investors flocked to Tesla on Tuesday as the stock significantly underperformed the broader market. (Source: VandaTrack)

Selling pressure for Tesla has mounted as concerns grow over CEO Elon Musk’s handling of Twitter after he was forced to finalize a $44 billion bid to acquire the social media platform. The stock is down about 28% since the closing of the deal.

Adding to Tesla’s woes, Goldman Sachs cut its price target on Tuesday to $235 from $305, citing the prospect of worsening demand as macroeconomic pressures persist. However, the bank maintained its Buy rating, with a positive long-term outlook.

“We believe that passing reduced costs to consumers, as well as factors such as expanding leasing programs and consumer tax credits, could help Tesla drive growth and margins,” Goldman analyst Mark Delaney wrote in a note to customers. “However, the degree to which these levers will help the volume and cost for Tesla to achieve them will be critical to monitor.”

Elon Musk's photo is seen through a Twitter logo in this illustration taken October 28, 2022. REUTERS/Dado Ruvic/Illustration

Elon Musk’s photo is seen through a Twitter logo in this illustration taken October 28, 2022. REUTERS/Dado Ruvic/Illustration

Enthusiasm for retail fades

Retail excitement for Tesla came on Tuesday as investors bought just $681 million worth of U.S. stock, the lowest figure since the previous inflation report in mid-November, according to VandaTrack. So far this month, retail flows into the market are down 20% from their year-to-date average.

Despite a slowdown in allocations, retail investor focus remains unchanged, with buying mainly in technology stocks, energy and some occasional dips, such as airline stocks dropping on Tuesday following a demand alert for JetBlue (JBLU ).

Retail investors have also shown enthusiasm for Tesla’s electric carmaker’s peers such as Lucid (LCID) and Rivian (RVN).

These names underperformed the market as economic uncertainty prompts institutional investors to de-risk, with individual investor buying helping to offset losses, according to VandaTrack.

Tesla, Lucid and Rivian continue to underperform as institutional investors de-risk, but retail investors are making up for their losses with fresh inflows.  (Source: VandaTrack)

Tesla and other EV makers continue to underperform as institutional investors de-risk, but retail investors are making up for their losses with fresh inflows. (Source: VandaTrack)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

Click here for the latest Yahoo Finance platform trend tickers

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Chirping, Facebook, Instagram, Flipchart, LinkedInAnd Youtube

Leave a Reply

Your email address will not be published. Required fields are marked *