US stocks: a rare chance to profit from volatility?

US stocks: a rare chance to profit from volatility?

  • 23.03.2025 07:56
  • fool.co.uk
  • Keywords: Tesla

US stocks face volatility, with Tesla shares dropping over 33% since mid-February. Global registration declines suggest competition from major auto manufacturers' EVs may be impacting sales. Investors are considering other US stocks with cheaper valuations for potential gains.

Tesla ProductsTesla ServicesTSLAsentiment_dissatisfied

Estimated market influence

Tesla

Tesla

Negativesentiment_dissatisfied
Analyst rating: Neutral

The article discusses Tesla's stock decline and challenges in car registrations, indicating a negative influence on the company.

Context

Analysis of US Stocks Volatility and Market Implications

Tesla's Stock Performance

  • Tesla stock drop: Fell by 33% since mid-February, continuing its downward trend from December.
  • Valuation metrics:
    • Trading at 87x forward P/E ratio after the decline.
    • Stock value halved from its latest peak.

Global Registration Trends

  • Registration declines:
    • Australia: -66%
    • China: -49%
    • Netherlands: -24%
    • Sweden: -42%
    • France: -45%
    • Italy: -55%
    • Portugal: -53%
    • Denmark, Norway, Spain: Similar declines.
  • UK outlier: Registrations up by 21%, but still slower than EV sales growth (42%).

Competitor Impact

  • Increased competition:
    • Traditional auto manufacturers launching EVs.
    • Consumer shift to explore alternatives in Europe, China, and Australia.

Strategic Considerations

  • Tesla's strengths:
    • Leading battery technology.
    • Investments in AI and robotaxis.
  • Growth risks:
    • Slowing vehicle registrations may challenge Tesla’s growth narrative.
    • Potential long-term effects of increased competition.

Market Implications

  • Investment opportunities:
    • Cheaper valuations in US stocks with similar growth prospects.
    • Investors considering alternatives to Tesla due to market volatility and competitive pressures.