Tesla shares fell on Monday, underperforming the consumer discretionary sector, as markets came under pressure from escalating tensions between the United States and Iran and rising oil prices. The electric vehicle maker's stock dropped 3.46% to $393.66, deepening its year-to-date loss to 12.41%.
The decline also came amid concerns over the stock's elevated valuation, with investor Gary Black arguing that a price-to-earnings multiple of around 209 times is difficult to justify. Concerns over Tesla's valuation were further compounded after the company's head of artificial intelligence confirmed the closure of the production line for the Model S and Model X to make way for the manufacture of Optimus humanoid robots.
Investors are awaiting the company's earnings results, due to be announced on 22 July, to determine whether record second-quarter deliveries of 480,100 vehicles, alongside an improvement in its market share in China, will be sufficient to support the lofty valuation.