What happened

Shares of electric-car company Tesla (NASDAQ: TSLA) took on a hit on Friday, falling as much as 6.5%. But the loss improved by the end of the day, with the stock finishing the trading day down 1.5%.

Though the stock's slide followed its decline on Thursday after Tesla reported its worst-ever quarterly loss, its sell-off on Friday seemed to be more closely tied to broader market trends.

Model X. Image source: Tesla.

So what

Tesla joined the ranks of growth tech giants like Amazon and Netflix on Friday, which sold off Friday afternoon alongside the S&P 500, but to a much greater degree. While Tesla has little in common with these tech giants' businesses, it does similarly trade with a very forward-looking valuation, making Tesla, Amazon, and Netflix more volatile than conservatively priced large-cap stocks.

Confirming the correlation of Tesla's stock price and the broader market sell-off, Tesla regained most of it losses just as the S&P 500 recovered.

AMZN Price data by YCharts

Now what

As a growth stock, Tesla shares will likely see significant volatility amid most meaningful swings in the broader stock market. But investors should stay focused on the underlying fundamentals.

In 2018, Tesla investors will want to ensure the Model 3 production ramp goes well and that the company begins reporting operating income on a consistent basis.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Tesla. The Motley Fool owns shares of and recommends Amazon, Netflix, and Tesla. The Motley Fool has a disclosure policy.