Investors have bid the stock market to all-time highs, and even amid some concerns from market participants about the sustainability of the gains they've seen, Monday's numbers remained narrowly mixed. The Dow Jones Industrial Average (^DJI 0.34%) managed to post a gain of 26 points to 36,126 as of 1 p.m. EST. The S&P 500 (^GSPC -0.65%) gave back 2 points to 4,681, while the Nasdaq Composite (^IXIC -1.55%) fell a slightly more substantial 43 points to 15,818.
Over the past year, Tesla (TSLA -0.45%) and CrowdStrike Holdings (CRWD -3.68%) have performed exceptionally well. The electric vehicle (EV) maker has tripled in value between last November and earlier this month, while the cybersecurity specialist has more than doubled. Yet both stocks have seen double-digit percentage pullbacks in the past couple of weeks, and the downward pressure continued on Monday. Below, we'll look at what's affecting Tesla and CrowdStrike and what it means going forward for shareholders.
Tesla falls as Musk cashes in
Shares of Tesla were down another 4% on Monday. That was enough to send the share price below $1,000 and the market capitalization of the entire company below the $1 trillion mark.
Image source: Tesla.
Tesla's most recent move lower has come in the wake of stock sales from CEO Elon Musk. So far, the pioneering EV leader has sold about $5 billion of his stake in Tesla, but he has also signaled that he could end up getting rid of a much larger stake. Indeed, some of the comments that Musk made were directed at congressional legislators who have been critical of high-wealth individuals and the options they have available to them to minimize their tax liability.
Some have also noted that competitors in the EV space are starting to gain traction. The huge boom in shares of electric truck company Rivian and the gains after Lucid Group's Air won the MotorTrend Car of the Year award serve as a reminder that Tesla is no longer the only game in the town among EV stocks.
Tesla's gains have been immense in the past couple of years, so giving back even a sizable chunk of that move would still leave long-term shareholders with big profits. Nevertheless, it's hard to predict where Tesla stock might go in the near future.
Taking a hit from Wall Street
Meanwhile, shares of CrowdStrike Holdings took a bigger hit, falling nearly 13%. The cybersecurity specialist was the subject of negative comments from Wall Street analysts at Morgan Stanley.
Morgan Stanley started its coverage of CrowdStrike with an underweight rating. It also chose a stock price target of $247, which was substantially below where the shares traded on Friday. In their write-up, analysts at Morgan Stanley argued that even if CrowdStrike can maintain sales growth, inevitable deceleration in growth rates will make it a challenge to sustain current valuations. Despite having some mixed views about whether the cybersecurity specialist could trade at premiums to industry peers over the long run, analysts seem to view CrowdStrike stock as a poor bet right now.
To its credit, CrowdStrike is still working hard to maintain its competitive advantages in cybersecurity. New product updates and partnerships with key leaders in the IT space should help its platform remain increasingly popular, with the goal of keeping its status as a must-have service for protection in the digital age.
Declines for CrowdStrike and Tesla haven't reached a level at which fundamental assessments of the companies' longer-term prospects appear to be under threat. After seeing so many short-term pullbacks end up reversing course and leading to record highs, losing confidence in Tesla and CrowdStrike seems premature at this stage.
