Key Takeaways
- An EV leader saw its stock drop on Tuesday, Oct. 7, 2025, after announcing lower-cost models, while a chipmaker added to its gains in the wake of a massive AI deal.
- Tesla shares slid after the company rolled out cheaper models that analysts said weren’t as cheap as they had hoped.
- Shares of Advanced Micro Devices added to yesterday’s gains on a big partnership with OpenAI.
Shares of the world’s most valuable electric vehicle maker slumped on Tuesday, Oct. 7, 2025, after revealing lower-cost models, while a chipmaker added to its gains in the wake of a massive AI deal.
The major U.S. equities indexes finished lower as tech stocks came under pressure. The S&P 500 dropped 0.4% and the Nasdaq declined 0.7% Tuesday, after retreating from intraday records. The Dow slipped 0.2%. To read more reporting from Investopedia on the day’s market moves, click here.
Advanced Micro Devices (AMD) was a bright spot in a down day for the broader semiconductor industry, as shares climbed 3.8%, adding to yesterday’s 24% jump on the chipmaker’s partnership with ChatGPT owner OpenAI.
Other semiconductor and AI-related stocks, including chip manufacturing equipment makers Lam Research (LRCX) and Applied Materials (AMAT), dropped along with shares of Oracle (ORCL) following a report that its cloud-computing margins could be smaller than expected. Shares of hard disk drive maker Seagate Technology (STX), which have soared in recent months on anticipation of AI-driven demand for data storage, dropped 7.3% to lead losses on the S&P 500.
Tesla (TSLA) shares dropped nearly 5% after the company announced lower-priced versions of its Model 3 and Y vehicles, with the 3 starting at around $35,000 and the Y near $38,000. Some analysts suggested the cheaper models weren’t as cheap as they had hoped.
Shares of Ford Motor (F), another automaker, tumbled about 6% following reports that a fire at an aluminum plant in Oswego, N.Y., would disrupt operations over the coming months.
Adtech darling AppLovin (APP) surged 7.6% to log the S&P 500’s top daily performance, clawing back some of Monday’s losses on reports of a probe by the Securities and Exchange Commission into AppLovin’s data collection practices. While acknowledging the investigation could drive short-term volatility, analysts at Oppenheimer reiterated an “outperform” rating on AppLovin’s stock Tuesday, suggesting their positive long-term outlook remains intact.
Shares of PayPal (PYPL) gained close to 5% after the financial technology firm announced the launch of its Ads Manager service for small businesses. Small businesses will be able to opt into PayPal’s Ads Manager with no upfront costs or minimum commitments, and the fintech will automatically serve relevant ads on the companies’ platforms, PayPal said.
