Summary of Volvo Shares Plunge

Overview

On February 5, 2026, shares of Volvo Car AB experienced a dramatic decline, plummeting by over 20% in a single trading session. This drop marks one of the most significant declines in the company's history, with the stock reaching a low of 28% at one point. It is important to note that this sell-off specifically pertains to Volvo Cars, the division focused on passenger vehicles, while the parent company, which manufactures trucks and buses, remained unaffected by the market turmoil.

Financial Results

The catalyst for this sharp decline was the release of the company's Q4 2025 financial results, which were described as disastrous. Key highlights include:

• Profit fell by more than 60% year-on-year, significantly missing investor expectations.
• Earnings per share (EPS) reported at 0.43 SEK, compared to the anticipated 1.52 SEK.
• Revenue decreased by several percent year-on-year, totaling 94.4 billion SEK, against expectations of around 100 billion SEK.

Investor Sentiment

Investor sentiment was further dampened by the management's inability to provide any positive outlook or reassurance. The end of various electric vehicle (EV) subsidy programs, combined with ongoing pressure on margins and sales from foreign competition and trade wars, contributed to a bleak forecast. Company representatives acknowledged that the previous year was challenging and expressed concerns that 2026 may not show significant improvement.

Stock Performance

Historically, Volvo's stock has been in a strong downtrend for several years. Although there was a recent rebound that suggested a potential trend change, the latest financial results have largely erased those gains. Despite this, bullish investors still have some momentum from the exponential moving average (EMA) averages working in their favor.