Investor Gary Black of The Future Fund LLC said on Wednesday that Tesla Inc. (NASDAQ:TSLA) continues to trail the Nasdaq 100 even as falling bond yields and lower oil prices create the kind of market backdrop that should normally help high-growth stocks.
Tesla Trails Nasdaq Despite Market Tailwinds
Black wrote on X that Tesla “continues to underperform NDX despite continued drop in 10yr treasury yields.” By use of charts, he said Tesla rose 10% over one year, compared with a 32% gain for the Nasdaq 100. Over three years, Tesla gained 43%, while the index rose 92%. Over five years, Tesla advanced 68%, compared with a 104% increase for the index.
Black said the underperformance came even as the 10-year Treasury yield fell another 10 basis points to 4.39% on Wednesday. He also noted that Brent crude hit $73 a barrel, its lowest level since late February.
Falling long-term bond yields usually help "long duration" growth stocks, a term Wall Street uses for companies whose biggest profits are expected far in the future. Lower yields reduce the rate investors use to value those future profits. Cheaper oil can also ease inflation pressure, giving growth stocks another theoretical tailwind.
Black Says FSD Hype Has Fallen Short
Yet Tesla remains weighed down by company-specific concerns and shifting investor behavior.
Black has repeatedly argued that Tesla’s stock has not lived up to the hype around unsupervised Full Self-Driving. He has said Tesla still operates only a small number of robotaxis without safety drivers, while Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Waymo continues to expand its autonomous ride-hailing business.
Black has also called Tesla’s FSD a "great product" that suffers from weak promotion. "The problem is a total lack of awareness with no advertising," he said earlier. He has urged Tesla to follow the marketing playbook of Apple Inc. (NASDAQ:AAPL) co-founder Steve Jobs, saying, "$TSLA has the best products but has no marketing."
SpaceX IPO Adds Selling Pressure
Market sentiment has also been disrupted by SpaceX’s massive IPO. SpaceX (NASDAQ:SPCX) raised $75 billion in an oversubscribed listing, and some investors appear to be rotating out of Tesla, the closest public proxy for exposure to Elon Musk, to fund new SpaceX positions.
According to Benzinga Edge Rankings, Tesla stock offers satisfactory Quality and Growth, but does not offer a favorable price trend in the Short, Medium and Long term.
Price Action: TSLA slid 1.61% to $375.46 at market close on Wednesday, rising 0.62% to $377.80 during the overnight trading session.
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