Tesla Leads Magnificent Seven Decline with 3.2% Slide as ETFs Drop 1.2%
Tesla shares plunged 3.2% on February 23, marking the biggest drop within the 'Magnificent Seven' as large-cap tech ETFs declined 1.2%. In Q4 2025 hedge funds allocated $11 billion to Tesla, ranking it seventh in mega-cap investments after Nvidia ($38.9 B) and Microsoft ($33.3 B).
1. ETF Slump Weighs on Tesla Shares
On February 23, large-cap tech ETFs fell sharply with the iShares Core S&P 500 ETF down 1.2% and SPDR S&P 500 ETF off 1.0%, pressuring all core tech names. Tesla experienced the steepest decline at 3.2%, reflecting profit-taking and outflows from Magnificent Seven–focused funds.
2. Q4 2025 Hedge Fund Allocation to Tesla
In the fourth quarter of 2025, hedge funds funneled $11 billion into Tesla shares, making it the seventh-largest mega-cap allocation behind Nvidia ($38.9 billion) and Microsoft ($33.3 billion). This surge underscores sustained institutional confidence in Tesla’s growth trajectory despite recent share volatility.