Tesla Inc. has slipped out of the top 10 largest U.S. companies by market capitalization, marking the first time in over a year that it has lost its position in this prestigious group.
Closing Wednesday’s trading session with a market cap of $562.24 billion, Tesla fell behind Visa Inc., which ended the day at $563.37 billion.
According to Dow Jones Market Data, Tesla (TSLA) last found itself outside the top 10 on January 20, 2023, and last trailed behind Visa on January 25, 2023.
Tesla shares experienced a decline of 2.3% during Wednesday’s session, marking the third consecutive trading day of losses. Over this three-day period, the stock has fallen by 12.9%, contributing to a year-to-date decline of approximately 29%. This downward trend has resulted in a loss of $228 billion in market capitalization for Tesla, as reported by Dow Jones Market Data.
The recent pressure on Tesla’s stock is attributed to concerns from Wall Street regarding factors such as price reductions and trends in China.
Baird analyst Ben Kallo commented, “Commentary regarding price cuts and the potential choppiness of cost improvements implies that margins may not have bottomed.” Despite sequential improvements in gross margins during the fourth quarter of 2023, Kallo anticipates a downturn in the first quarter.
Moreover, Kallo notes that while delivery estimates have decreased for the company, he believes there is still room for them to fall further. Despite maintaining an outperform rating on the stock, Kallo flagged it as a “bearish fresh pick” in late January due to his apprehensions about delivery expectations.
In contrast, Visa shares have demonstrated resilience, showing an approximately 8% increase since the beginning of the year and a 24% rise over the past 12 months. The stock currently sits just under 2% below its record close of $285.63, achieved on February 28.
Visa’s Chief Executive Ryan McInerney shared insights at an RBC investor conference on Tuesday, highlighting a “steady-as-she-goes” spending landscape in the U.S. Despite some spending deceleration in certain international markets with a high percentage of variable-rate mortgages, Visa remains optimistic. The company is also benefiting from the continued growth of travel in and out of China, along with accelerated growth in inbound travel to the U.S.
