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As the artificial intelligence theme took center stage, sector rotation has translated into weakness for some hot stocks in the prior rally. A good example is Tesla (TSLA) stock, which has corrected by 13% in the last 52-weeks. However, the weakness in TSLA stock can be attributed to multiple factors. The electric vehicle market growth has slowed on a relative basis, and intense competition has impacted key margins.
Despite this, Tesla is among the best in the business. With a strong brand pull and innovation-driven growth, Tesla has managed to capture incremental market share in the U.S. For EV sales through August, Tesla’s market share was 52% as compared to 43% a year earlier. While the overall EV market contracted by 30%, Tesla has strengthened its competitive position.
