Private investors are piling on Tesla as the stock remains under pressure

Individual investors piled on Tesla (TSLA) on Tuesday, seeing the recent fall in shares of the electric car giant as a dip-buying opportunity for their favorite stocks.

According to data from VandaTrack, Tesla was the most popular buy among retailers during Tuesday’s session, even as the company missed a rally across the broader indices following a lower-than-expected inflation report.

Shares of Tesla fell 4.1% on Tuesday to close around $161, while the S&P 500, Dow and Nasdaq each closed higher. The losses continued into Wednesday, with the price down about 1% around 1pm ET.

The company got off to a brutal start in December, with shares down 17% so far this month and more than 50% year-to-date.

Despite the declines, Tesla’s net retail purchases reached $610 million over the five trading sessions that ended Tuesday, according to VandaTrack’s analysis of individual investor trends.

Over the same five-day period, Apple (AAPL), Amazon (AMZN), NVIDIA (NVDA), and AMD (AMD) followed Tesla in popularity, with net inflows of $210 million and $188 million, $147 million, and $90 million , respectively.

Retail investors piled on Tesla on Tuesday as stocks notably underperformed the broader market.  (Source: VandaTrack)

Retail investors piled on Tesla on Tuesday as stocks notably underperformed the broader market. (Source: VandaTrack)

Selling pressure for Tesla has increased as concerns grow over CEO Elon Musk’s management of Twitter after he was forced to go through with a $44 billion bid to acquire the social media platform. The stock is down about 28% since the deal closed.

Adding to Tesla’s woes, Goldman Sachs lowered its price target from $305 to $235 late Tuesday, citing the prospect of worsening demand as macroeconomic pressures continue. However, the bank maintained its Buy rating, with a still positive long-term outlook.

“We believe that passing lower costs on to consumers, as well as factors such as lease program expansions and consumer tax credits, can help Tesla drive growth and margins,” Goldman analyst Mark Delaney wrote in a note to clients. “However, the extent to which these levers will help volume, and the costs for Tesla to achieve them, will be critical to monitor.”

Elon Musk's photo is seen through a Twitter logo in this illustration, taken on October 28, 2022. REUTERS/Dado Ruvic/Illustration

Elon Musk’s photo is seen through a Twitter logo in this illustration, taken on October 28, 2022. REUTERS/Dado Ruvic/Illustration

Retail enthusiasm is fading

Retail enthusiasm for Tesla came as investors bought just $681 million worth of US securities on Tuesday, the lowest figure since the previous inflation report in mid-November, according to VandaTrack. So far this month, retail flows into the market are down 20% compared to the annual average.

Despite a slowdown in allocations, retail investor focus remains unchanged, with purchases primarily in technology stocks, energy and the occasional decline, such as aviation stocks on Tuesday when they fell after a demand warning from JetBlue (JBLU).

Private investors have also shown enthusiasm for Tesla’s electric car maker peers, such as Lucid (LCID) and Rivian (RVN).

These names underperformed the market as economic uncertainty prompted institutional investors to de-risk, with purchases by individual investors helping to offset losses, according to VandaTrack.

Tesla, Lucid and Rivian continue to underperform as institutional investors de-risk, but retail investors offset their losses with new inflows.  (Source: VandaTrack)

Tesla and other EV makers continue to underperform as institutional investors de-risk, but retail investors are offsetting their losses with new inflows. (Source: VandaTrack)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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