Call it the latest tug-of-war between Tesla (TSLA) bulls and bears. But this time, it’s institutional versus retail investors.
Tesla stock is down 9% thus far in January, testing investors’ mettle, with the broader market flat for the year but prone to big swings. The recent sell-off in software stocks has market investors, both big and small, recalibrating.
The big debate: whether the bet on Tesla’s AI and autonomous ambitions for the future trumps short-term pain stemming from its slowing automotive business (which still accounts for 90% of Tesla’s revenue).
Institutional investors are taking profits, or booking losses, on their Tesla positions. Per tracking by fintech alternative data provider Quiver Quantitative (as first noted by Stocktwits), numerous funds have been selling Tesla stock.
Per filings as of the end of the fourth quarter, UBS Asset Management cut its Tesla stake by about 59 million shares in the quarter to just over 20 million total shares, a reduction of roughly 74%, leaving its stake at $9.1 billion.
Nomura Holdings reduced its position by more than 80%, selling nearly 5 million shares, leaving it with about 1.2 million shares worth $545 million.
Goldman also cut its stake by more than 2.4 million shares, though it remains one of Tesla’s larger institutional holders, with more than 27 million shares worth around $12.2 billion.
Morgan Stanley reduced its exposure for a third consecutive quarter, per Quiver, ending the year with about 35.8 million shares, which were worth around $16.1 billion at the end of the quarter.
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Meanwhile, retail investors have maintained conviction.
Per JPMorgan data, retail investors bought $326 million in Tesla stock during the week of Feb. 12-18, behind only Nvidia (NVDA), Amazon (AMZN), and Microsoft (MSFT).
“Despite a sentiment overhang tied to ambitious capex plans — dampening an otherwise solid earnings season and prompting some to find refuge away from AI themes, retail investors remained firm in their stock allocation, adding to NVDA, AMZN, MSFT, TSLA, SNDK and MU this week,” JPMorgan’s Arun Jain wrote in a note published on Wednesday.
Jain noted that “Magnificent Seven” companies still account for the majority of retail investors’ purchases year to date, with Tesla second only to Microsoft, followed by Nvidia, Amazon, and Netflix (NFLX).
Whether retail will eventually follow institutional money is a big question mark.
For now, they are staying put, adding to some positions and likely reserving some money for the next big Elon Musk bet that retail has been locked out of but will soon have an opportunity to buy: the upcoming SpaceX (SPAX.PVT) IPO.
