What happened
ChargePoint Holdings (CHPT -1.43%) stock is sliding this week. The electric vehicle (EV) charging company's share price was down roughly 6.6% from the end of last week heading into Friday's market open, according to data from S&P Global Market Intelligence.
While there doesn't appear to have been any fresh business-specific news driving ChargePoint's share price lower, the market has been weighing mounting macroeconomic and geopolitical risk factors. Investors are reacting to uncertainty on the horizon and moving out of stocks, and the EV charging company's share price is falling due to the trend.
Image source: Getty Images.
So what
Inflation continues to run hot, and macroeconomic conditions have investors feeling much more risk averse lately. Further complicating matters, the Federal Reserve will likely carry out major interest rate hikes this year in hopes of getting inflation under control. Rising interests usually create a more challenging backdrop for growth stocks, and there are concerns that even substantial rate hikes might not do enough to curb inflation. The market is also digesting ongoing developments in the war between Russia and Ukraine this week.
In addition to situational indicators and comments from Russian officials suggesting that military actions could escalate to new levels, Russia has also cut off gas deliveries to Poland and Bulgaria in conjunction with its demand that "unfriendly countries" pay for gas in rubles. Russia supplies much of Europe's oil and gas, and the prospect of crucial supplies being cut off has major implications for the region and the global economy. While catalysts that work to shift usage away from oil and natural gas and toward electric and renewable energy sources could benefit ChargePoint in the long term, the disruptions are prompting declines for its valuation in the near term.
Now what
Earnings from high-profile growth companies can often have ripple effects when it comes to valuations for other stocks, and there's a fair chance that Amazon's recent first-quarter results will lead to some more turbulence for growth stocks in the near term. The company's Q1 report arrived with a slight miss on revenue and a loss per share that was significantly wider than expected, and the results could dampen market appetite for other stocks with forward-looking valuations. News also emerged on Thursday that the U.S. economy had unexpectedly contracted 1.4% year over year in the first quarter, and the decline in gross domestic product will likely be a big factor in shaping market sentiment going forward.
After recent sell-offs, ChargePoint now has a market capitalization of roughly $4.5 billion and is valued at approximately 9.75 times this year's expected sales. While the company's valuation has already fallen precipitously from its high, the company's stock could be in for more bumpy trading in the near term.
