“The shifting dynamics of the market have thrust these Nasdaq stocks, such as Tesla and Airbnb, into a gripping bear market, leaving investors on the edge of their seats, questioning the future of these once soaring giants.”
Mounting Pressure on Nasdaq Composite as Tech Stocks Decline
The tech-heavy Nasdaq Composite has been facing significant pressure as interest rates remain high. On Wednesday, the index experienced a decline of 2.4%, marking its worst day since February. With a drop of over 10% from its high in July, the Nasdaq has officially entered correction territory.
Contributing to the index’s decline are two prominent stocks: Alphabet and Tesla. Alphabet saw a slide of 9.5% on Wednesday due to disappointing cloud revenue. Tesla, on the other hand, experienced its worst week of the year after its third-quarter earnings and revenue fell below analyst expectations.
These two stocks are not alone in their negative performance. Several other names within the Nasdaq are already in a bear market, with their prices down more than 20% from their 52-week highs. CNBC Pro recently compiled a list of these stocks, including Tesla, which is down 29% from its high in July.
Analysts have varied opinions on Tesla’s future. While 21 out of 46 analysts maintain a hold rating on the stock, calling for an average upside of 10%, some experts are more skeptical. Bernstein’s Toni Sacconaghi, for example, has an underperform rating with a $150 price target, implying a potential 29% downside.
Another stock on the list is Airbnb, which is down 23.5% from its 52-week high in July. Half of the analysts covering the stock have a hold rating, with a corresponding 23% upside estimate. KeyBanc Capital Markets recently downgraded Airbnb to sector weight, citing the potential risk to room nights and average daily rate growth as leisure travel tailwinds fade.
Enphase Energy, down 72.2% from its 52-week high, has over 60% of analysts rating it as a buy or strong buy. The average consensus price target suggests a 75% upside from the current price. However, the stock has faced challenges, including a 15% decline after competitor SolarEdge warned of weakening demand in European markets.
Dollar Tree, which is 36% off its 52-week high in November 2022, has analysts maintaining an average buy rating with a potential upside of 37%. The stock has been affected by factors such as resuming student loan payments and rising gas prices, leading to a decline of over 23% so far this year.
These stocks’ performances highlight the challenges faced by the Nasdaq Composite and the tech sector as a whole. As interest rates continue to impact the market, investors will closely monitor the future direction of these stocks and the index as a whole.
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