Tesla Faces Uphill Battle as Q4 Results Disappoint

In a surprising turn of events, Tesla (NASDAQ: TSLA) finds itself as the sole underperformer among the "Magnificent Seven" this year. The electric vehicle (EV) giant witnessed an 8.8% premarket plunge after unveiling disappointing Q4 results and a gloomy 2024 outlook.

Q4 Results Fall Short

Tesla reported Q4 adjusted earnings per share (EPS) of 71 cents, missing the consensus estimates of 74 cents. Despite a substantial quarterly net income surge to $7.9 billion, driven by a one-time noncash tax benefit, the company faced challenges as its automotive revenue rose by just 1%. Operating margin also took a hit, standing at 8.2%, down significantly from the previous year.

Concerns Loom Over 2024 Outlook

Investors' primary concern lies in Tesla's 2024 outlook, where the company warned of potential significant drops in vehicle volume growth. This caution stems from the company's efforts to roll out its next-generation vehicle in Texas, positioning itself "between two major growth waves."

Global Price Cuts Impact Profit Margins

Last year, Tesla delivered 1.8 million cars and implemented widespread price cuts globally, negatively affecting profit margins. This led to several Wall Street firms lowering their price targets on Tesla's stock.

Tesla Left Behind as Magnificent Seven Thrives

In contrast, other tech stocks in the Magnificent Seven, including Nvidia, Meta Platforms, Microsoft, and Google, have continued their momentum in 2024. The S&P 500 reached record highs, driven by ongoing investor interest in the tech sector.

Comparative Performance

While chip giant Nvidia spearheads with a gain of over 24%, Facebook's Meta Platforms climbed more than 11%, and Microsoft and Google advanced about 7.7%. Apple and Amazon also maintained positive momentum, with Tesla being the outlier, experiencing a significant 17% drop since January 1.

As the Magnificent Seven maintains its stride, Tesla faces a challenging year ahead. The company's disappointing Q4 results and cautious 2024 outlook have positioned it as an outlier among its tech counterparts, leaving investors to ponder its future performance in a competitive market.