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What is driving the Tesla stock price at the moment?


Data from AI news analytics pioneer Blu Analytics shows that negative Twitter news is not the main driver of the Tesla share price despite claims the high profile acquisition is hitting the stock market performance of the electric car maker.

Blu Analytics, which has developed artificial intelligence technology able to analyse, process and understand news in real-time to deliver actionable insights in trading and financial markets, looked at five million news articles on Tesla, Twitter and Elon Musk between January 1st and November 8th this year.

Based in Germany, Blu Analytics is a pioneer in the field of news analysis based on artificial intelligence/machine learning for capital markets. It is building a deep artificial intelligence technology which is able to analyse, process and understand news in real-time to deliver actionable insights and trading signals.

Why are Tesla shares selling off?

Tesla shares are down 57.49% year to date with concerns about the Twitter deal and the possible distraction of Elon Musk plus debt issues highlighted as a major concern. But Blu Analytics data shows Tesla’s share price is driven more by the performance of Chinese EV rivals NIO, Xpeng and Li Auto.

Blu Analytics using data from RavenPack to measure the relevance of media coverage, narrowed the five million news articles down to around 65,000 ranking them for overall sentiment.

Just 37% of articles mentioning Twitter, Tesla and Elon Musk were positive compared with 63% which were negative, but the negativity only had a marginal effect on Tesla shares with volatility having more impact on its performance against the NASDAQ.

When sentiment on Twitter and Tesla turned clearly negative in July and August, Tesla performance improved, analysis shows.

Blu Analytics CEO Balazs Klemm said: “The story line that Tesla behaves like a Chinese electric vehicle stock explains the performance better and is more grounded in facts than sensational headlines that Musk is distracted. We can see a clear turning point on September 29th when the first major analyst downgrades came in followed by an actual earnings miss on October 4th followed by Tesla cutting its prices on cars in China. Tesla behaves like a Chinese automobile stock.”

Between September 29th and November 9th shares in Tesla fell by 38% while LI Auto dropped 35%, NIO 47%and Xpeng fell 50%. Since September 28th Tesla has underperformed the NASDAQ by 32% pointing to the influence of Chinese competition rather than Twitter.

Blu Analytics data shows that Tesla outperformed the NASDAQ by 16% from the start of the year to April 4th when Elon Musk first revealed his stake in Twitter. It then underperformed NASDAQ by 14% until Elon Musk announced the takeover was on hold before outperforming NASDAQ by 3% until the takeover was confirmed on October 4th.

However, analysis shows from the start of the year to October 4th Tesla performance tracked the NASDAQ with both down around 29% indicating Tesla performance is driven more by volatility and market conditions.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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