Tesla’s place in the ‘Magnificent Seven’ at risk after Elon Musk’s EV company drops out of the top 10 global megacaps as peers hit record highs

While Meta notched up the single biggest daily gain of any company in history, Tesla—part of the so-called Magnificent Seven stocks on Wall Street—is struggling to remain in the top 10 largest U.S. companies by market capitalization, while it has completely dropped out of the global rankings.

Currently, it’s hanging on by a thread in 10th place on the U.S. list after Monday’s selloff, while its six other exalted peers like Microsoft, Nvidia and Meta have been hitting all-time highs.

Tesla recently admitted core car sales would increase at an unquantified but “notably lower” pace than last year, despite the launch of the new Cybertruck.

That means Tesla investors will likely have to wait until the latter half of 2025, when the new $25,000 entry model is slated to arrive, for the high growth rates of the past to return.

CNBC’s Jim Cramer bellowed after earnings day: “Tesla is out of the Magnificent Seven—done, stick a fork in it. You can’t stay magnificent with a ‘notably lower’ growth rate!”

Even Tesla bulls like analyst Alex Potter of Piper Sandler admitted afterward there was little rush to own the stock.

Does Tesla need a change of board?

Ross Gerber, CEO of wealth management firm Gerber Kawasaki, blamed the problems on last week’s shock ruling over Elon Musk’s record-breaking $56 billion pay package from 2018.

A Delaware court voided shareholder approval for his compensation after detailed testimony by the board revealed a failure by Tesla to disclose directors were, almost to the person, in the pocket of Musk.

“They really need to get rid of three or four board members and replace them with truly independent board members that have no financial ties to Elon,” Gerber told CNBC’s Last Call on Monday.

“The problem with that is Elon isn’t going to want to deal with those people, and I learned this when I ran for the board a year ago.”

According to Gerber, the 200-page judgment that directors were not independent meant any material decision taken by Tesla could potentially be contested in court.

“It’s going to be very hard for the company to move forward with the current board, and this is I think one of the reasons the stock is selling off,” the wealth manager explained.

Storybook rally melts away amid softening fundamentals

Tesla joined the Magnificent Seven after mounting a storybook rally in 2023 that doubled the price of its shares.

Even as Musk needed to resort to repeated deep price cuts (predicted here by Fortune) to mitigate his budding demand problem, it appeared as if the tech mogul prevailed over rivals.

In May, the collective global auto industry almost in lockstep declared plans to adopt Tesla’s proprietary charging standard.

When the Tesla CEO later revealed he was in talks to license Full Self-Driving technology to his first customer, hopes soared among investors that the industry would have little choice but to fall in line once again behind Musk.

But 2024 has proved to be a very different year altogether.

Last year’s optimism has vanished amid a litany of bad headlines, the governance issue only being the latest.

First Tesla was overtaken by China’s BYD in sales volume in the fourth quarter, then it reported annual operating profit tumbled by over a third—and those FSD talks?

They’ve gone nowhere, as Musk conceded carmakers don’t believe his self-driving software actually works.

This story was originally featured on Fortune.com