Shares of Tesla (TSLA -0.15%) slid sharply on Monday, extending a bearish few weeks for the stock. It finished today almost 6% lower.
The electric-car maker's shares were likely down on Monday primarily due to a weakness in the overall market, particularly among tech stocks.
Reflecting the tech stock sell-off on Monday, the tech-heavy Nasdaq Composite fell 2.4% even as the S&P 500, which is better diversified across other sectors, fell only 0.5%. Many growth stocks like Tesla fell even more sharply than the Nasdaq.
Monday's market dynamics represented a continuation of a trend in recent weeks of tech stocks taking a breather after a big run higher in 2020. Tesla stock has been hit especially hard, declining more than 30% since mid-February. Year to date, it is now down more than 20%.
Investors should note that Tesla stock is still up about 300% over the past 12 months and 570% since the beginning of 2020. It's not too surprising, therefore, to see the growth stock pulling back.
Growth stocks are generally more volatile than the overall market. Investors, therefore, should plan for more volatility from stocks like Tesla. On the other hand, shareholders should primarily remain focused on the company's underlying business. On that note, management guided for its year-over-year vehicle delivery growth to accelerate this year compared to last year.
"We are planning to grow our manufacturing capacity as quickly as possible," Tesla said in its fourth-quarter shareholder letter. "Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. In some years we may grow faster, which we expect to be the case in 2021."