A day after snapping its longest-ever winning streak, Tesla is embarking on a losing run.
The stock slid as much as 3.7% at the open on Thursday, having fallen 0.7% on Wednesday to halt 13 straight sessions of gains.
Tesla rose 41% in the 13-day ascent through Tuesday, pushing the world’s most valuable automaker deep into overbought territory. Its relative strength index rose to 88 earlier this week, far above the level of 70 that signals to some technical analysts that a stock may have risen too far, too fast.
The rally was fueled by positive newsflow that included General Motors and Ford making moves to adapt their electric vehicles to Tesla’s Superchargers, Tesla Model 3 sedans becoming eligible for the full U.S. tax credit, as well as a broader investor hunger for artificial intelligence stocks.
However, the hawkish stance taken by the Federal Reserve on Wednesday has caused shares of the year’s biggest winners to take a breather. Nvidia, which has led mega-cap tech stocks higher this year, also fell, set to snap a five-day winning streak.
Still, while the jury is out on whether Tesla is indeed an artificial intelligence play for investors, some on Wall Street have warmed up to the idea.
At least two analysts raised their price targets on Tesla on Wednesday, with RBC Capital Markets’ Tom Narayan saying the so-called Robotaxis, or self-driving cars, could eventually be 70% of Tesla’s value. Meanwhile, Daiwa analyst Jairam Nathan said the broader industry shift toward Tesla’s charging standard in North America will help refocus the investment horizon for the company to the longer term, from the attention on the cadence of quarterly results.