Al Root

Tesla stock was down early Monday. China's artificial-intelligence impact on Nvidia and other tech companies looks to be the biggest reason.

Shares of the EV maker were down more than 4% at $387.74 in premarket trading while S&P 500 and Dow Jones Industrial Average futures were down 2.3% and 0.9%, respectively.

Nasdaq Composite futures were down 4.2% with Nvidia stock falling 11.6%. Other tech stocks were down, too. Broadcom shares fell almost 14%. Microsoft and Alphabet shares were down about 6% and 4%, respectively. Rivian Automotive and Lucid Group shares were both down more than 2% in premarket trading. Ford Motor and General Motors shares were off almost 1% each.

The drops came after Chinese AI app DeepSeek topped Apple's app chart over the weekend. It seems to perform as well as other AI apps such as OpenAI's ChatGPT, but appears to have been developed at a fraction of the cost.

Tesla, of course, doesn't develop AI-fueled chatbots, but large index drops will impact the shares of many companies.

Tesla, of course, is investing heavily in AI computing, using it to train self-driving technology and humanoid robots, which the company wants to start selling this year.

Coming into Monday trading, Tesla shares were up about 70% since the company's Robotaxi Day on Oct. 10 when it showcased self-driving technology. Tesla plans to launch a self-driving robotaxi service later this year.

Tesla reports fourth-quarter earnings on Wednesday evening. Investors will be looking for an update about its AI-fuel self-driving plans.

It will be the fifth consecutive trading-day drop if Tesla shares finish lower on Monday.

Write to Al Root at allen.root@dowjones.com

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January 27, 2025 07:24 ET (12:24 GMT)

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