The growth stock’s gain is likely primarily due to a bearish day for the overall market, with growth stocks getting hit particularly hard.
Highlighting the market’s pullback on Friday, the S&P 500 was down about 1.9% as of this writing. Many growth stocks like Tesla, however, were down a few percentage points or more. Amid recent market volatility, some investors may be getting skittish, taking some profits on stocks that have seen outsize returns recently.
Tesla, of course, is a good candidate for profit-taking. After all, shares are up 600% over the past 12 months — even including today’s decline.
Though it’s impossible to know where Tesla stock will trade in the near term, the underlying business has been demonstrating impressive execution recently.
Tesla recently reported strong fourth-quarter results. Though adjusted earnings per share for the quarter was worse than expected, revenue came in ahead of estimates as it soared 46% year over year. In addition, management guided for an acceleration in vehicle sales growth in 2021. Specifically, management believes vehicle deliveries this year will be more than 50% higher than in 2020.