Tesla’s (TSLA) rough November keeps getting worse. Shares tumbled again on Thursday, and the damage is falling hardest on the small traders who spent the past few weeks buying every dip they could find.
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Coming into Friday, Tesla stock was down about 13% for the month and roughly 2% for the year. The reversal after Thursday’s rally hit retail investors especially sharply, even though they had been aggressively rotating into Tesla, Nvidia (NVDA), Alphabet (GOOGL), and other growth favorites.
Retail Traders Absorb the Blow as the Market Turns
Retail investors spent the week pouring money into Tesla and other high-beta names. They kept buying Nvidia “every day this week, ahead of its earnings,” according to JPMorgan (JPM) strategist Arun Jain.
That strategy backfired after Thursday’s reversal. Tesla closed at $395.04, down 2.2%. Nvidia slid to $180.64, down 3.2%. Those drops wiped out much of the short-term gains retail traders had chased, leaving them holding the losses while institutional portfolios barely flinched.
Jain said retail traders also rotated out of Health Care, Industrials, and Staples to load up on Consumer Discretionary and Communications. Tesla and Alphabet led the way. The dip-buying strategy worked well for most of 2025, but this time the timing was off.
Nvidia’s Rally Fizzles and Pulls Tesla Down With It
Nvidia’s blowout earnings initially lifted market sentiment, and its stock traded as high as $196 on Thursday. That momentum faded fast. Nvidia closed down more than 3%, and Tesla followed the same path.
Both stocks are magnets for retail traders because they sit at the center of the AI trade. Nvidia builds the hardware and software that power AI models. Tesla is trying to build AI products on top of that infrastructure. When AI names move, both stocks often swing together.
Even with the drop, Nvidia remains up 35% year to date. Tesla is down about 2% for the year, but still up 84% from its 52-week low in April.
Valuation Gaps Create an Uneven Market Reaction
Tesla and Nvidia may trade in the same lane, but their financial profiles could not be more different.
Nvidia trades at about 25 times expected 2026 earnings. This puts it in the same valuation neighborhood as Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), and Meta (META), which also sit near 25 times earnings as they build AI-heavy data centers.
Tesla trades at about 180 times expected 2026 earnings. Its core AI vision, robotaxis and humanoid robots, has not yet delivered real profit. That makes Tesla more sensitive to selloffs when investors pull back from high-growth themes.
The market still wants AI exposure, but Thursday’s reversal showed how quickly sentiment can shift when valuations stretch too far.
Is Tesla Stock a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 10 Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. After a 16.4% rally in its share price over the past year, the average TSLA price target of $383.37 per share implies 3% downside risk.
