Tesla is not one of the 10 largest U.S. companies for first time in 13 months

By Emily Bary

Visa eclipses Tesla in market capitalization for the first time since January 2023

Tesla Inc. is no longer one of the 10 largest U.S. companies by market capitalization, dropping out of that elite club Wednesday for the first time in 13 months.

The electric-vehicle company ended Wednesday's session with a $562.24 billion market cap, putting it behind Visa Inc. (V), which finished the day at $563.37 billion.

Tesla (TSLA) last ranked outside the top 10 on Jan. 20, 2023, according to Dow Jones Market Data. It last trailed Visa a few days later, on Jan. 25, 2023.

Shares of Tesla lost 2.3% in Wednesday's session, racking up their third consecutive trading day of declines. The stock is off 12.9% over that three-session stretch and down about 29% on a year-to-date basis. Tesla's stock selloff so far this year has erased $228 billion from the company's market cap, according to Dow Jones Market Data.

The stock has come under recent pressure as Wall Street worries about factors such as price cuts and China trends.

"Commentary regarding price cuts and the potential choppiness of cost improvements implies that margins may not have bottomed," Baird analyst Ben Kallo wrote overnight. While gross margins improved sequentially in the fourth quarter of 2023, Kallo expects they'll turn lower in the first quarter.

Further, he says that though delivery estimates have come down for the company, he thinks they still have room to fall. Kallo has an outperform rating on the stock but established it as a "bearish fresh pick" in late January, given his concerns about delivery expectations.

Read: A Tesla bull turns bearish, and warns EV maker could lose money this year

Meanwhile, Visa shares have remained relatively resilient, up about 8% so far this year and 24% higher over a 12-month basis. The stock sits less than 2% below its record close of $285.63, achieved Feb. 28.

Visa Chief Executive Ryan McInerney said at an RBC investor conference Tuesday that the company was seeing a "steady-as-she-goes" spending landscape in the U.S., even as there's been some spending deceleration in certain international markets with a high percentage of variable-rate mortgages.

The company is also benefiting from the continued growth of travel in and out of China and accelerating growth for inbound travel to the U.S.

-Emily Bary

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03-06-24 1743ET

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