Tesla drops out of 10 largest US companies

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

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

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

Shares of Tesla lost 2.3 per cent in a session, racking up their third consecutive trading day of declines. The stock is off 12.9 per cent over that three-session stretch and down about 29 per cent 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.

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

Visa Chief Executive Ryan McInerney said at an RBC investor conference that the company was seeing a "steady-as-she-goes" spending landscape in the US, 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 US.