Tesla Inc. TSLA has been surpassed in market value by pharmaceutical giant Eli Lilly LLY, following a 12% single-day plunge in Tesla’s stock.
Tesla’s Q4 Revenue Miss
What Happened: Tesla’s fourth-quarter earnings report, which fell short of revenue and profit expectations, triggered a significant drop in its stock price. The EV maker’s market cap dipped to $581 billion, while Eli Lilly’s climbed to $595 billion.
The earnings report, coupled with weak growth forecasts for the coming year, played a significant role in the stock’s decline. Tesla’s earnings call was also met with criticism, with one analyst labeling it a “train wreck.”
Eli Lilly’s Ascendancy
Meanwhile, Eli Lilly’s ascent began in 2023, driven by the success of its weight-loss drugs Mounjaro and Zepbound, which led to a 59% surge in its shares for the year. The company’s stock has appreciated 79% over the past 12 months.
Despite being a part of the “Magnificent 7” tech stocks that propelled the market rally last year, Tesla’s stock has plummeted 27% this month. The EV maker was also recently outpaced by Chinese EV manufacturer BYD in car sales, as reported by Business Insider.
Analyst and Investor Sentiments
Wells Fargo analyst Colin Langan reportedly dubbed Tesla’s earnings report as a “trifecta of bad news,” pointing to slowing sales growth, inability to further cut costs, and CEO Elon Musk’s controversial bid to own a 25% stake in the company.
The Significance
Tesla’s recent performance has raised concerns about its position in the “Magnificent Seven” list of mega-cap stocks.
CNBC’s “Mad Money” host Jim Cramer had recently hinted at Tesla being replaced by Eli Lilly in the Magnificent Seven, suggesting that Tesla might be on a “growth pause” compared to its Big Tech counterparts. Later, Cramer confirmed his stance by suggesting Tesla’s removal from the list due to its recent underperformance.
On the other hand, Eli Lilly’s stock continues to surge, largely due to the upside potential of its GLP-1 drug Mounjaro.
Image Created With Dall-E AI
Read Next: DWAC, NFLX,BABA, NVVE, TSLA: Why These 5 Stocks Are Trending Today
Engineered by Benzinga Neuro, Edited by
Shivdeep Dhaliwal
The GPT-4-based Benzinga Neuro content generation system exploits the extensive Benzinga Ecosystem, including native data, APIs, and more to create comprehensive and timely stories for you.
Learn more.