Investor Worries Surround Apple and Tesla in the Spotlight

Double-digit declines

Which stocks am I talking about?

Apple, the maker of world-famous products like the iPhone and Mac, and electric vehicle (EV) leader Tesla. These stocks have disappointed investors with their performance over the past few months, falling 11% and 32%, respectively, since the start of the year.

In fact, they even weighed negatively on the performance of the S&P 500 in the first quarter, together shaving 1.3 percentage points off the index's return, according to Statista. The chart below shows Apple's -7.1% contribution and Tesla's -5% contribution to the S&P 500's total return for the quarter. These two made the biggest negative contributions to the index.

Tesla's troubles

Now let's consider Tesla. The company last year made moves such as lowering the prices on certain vehicles to increase volume and cutting production costs, and this is positive. But at the same time, some of Tesla's current efforts are weighing on earnings, and the company also faces headwinds such as competition and negative currency impact.

Tesla shares also trade for 57x forward earnings estimates, making them the most expensive of all of the Magnificent Seven stocks by this measure. This clearly could hurt demand for the stock and spur investors to buy shares of cheaper Magnificent Seven players right now.

As mentioned above, Nvidia has posted the best performance of all of these companies and contributed the most to the S&P 500's increase so far this year. And for good reason. The tech giant delivered triple-digit gains in revenue and net income in the most recent quarter and just announced the upcoming launch of its much-anticipated Blackwell architecture and most powerful chips yet.

Is the party over for Apple and Tesla?

Does this mean the party is over for Apple and Tesla (and their shareholders)? Not necessarily. The long-term picture remains bright for both of these market leaders.

Apple's solid moat -- its brand strength -- should ensure its products' dominance in their markets, and the company's next growth engine may be its services business. Tesla remains the EV leader in the U.S. and is developing the technologies today that could help it stand out over time -- and maintain this leadership.

All of this means that, even though Apple and Tesla are standing in the spotlight today for all the wrong reasons, they -- and their investors -- still could score a major win over the long term.Should you invest $1,000 in Apple right now?

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