- Tesla shares witnessed a hike of more than 40% in 2 days after a US analyst predicted the electronic car maker can have a market value of more than $1.3 trillion in less than a 5-year timespan.
For 2nd consecutive day, electric car maker Tesla’s shares saw a hike. Tesla’s shares closed at $887 US apiece on Tuesday. With this figure, Tesla’s share doubled in value since the start of 2020.
Investor’s interest in Tesla shares began last week when on Wednesday the company said it expected to roll out around 500,000 vehicles this year (an increase of 50% from last year’s figures).
In January, the company closed out with a stock price of $650 per share. But the real cheerfulness kicked in this week as the stock has gone up by 20% on Monday and another 13% on Tuesday.
Barry Schwartz, chief investment officer at Baskin Wealth Management in Toronto “I wish we owned the stock but we don’t participate in manias, people are only buying this stock because it’s going up in price — there’s no way to justify the valuation. It reminds me of the dot-com boom”
At current prices, Tesla is valued at approx. $150 billion. That’s more than the US carmakers GM, Chrysler and Ford’s net worth COMBINED! Even though the 3 of them sold more vehicles than Tesla does annually.
Elon Musk who is already world’s 22nd richest person with $41 billion fortune, will collect a mind-whopping bonus if Tesla becomes a $650 billion company by 2028. Presently Tesla is the world’s 2nd most valuable carmaker behind Japan’s Toyota.
Despite this, bullish financial analysts reckon Tesla’s share value will go upwards. They expect the company to dominate the electric car market globally.
Catherine Wood, the chief investment officer of ARK Invest, said buying Tesla shares should be a “no-brainer”. ARK, which has long been one of the most bullish on Tesla’s potential, said it expected the shares would rise to $7,000 by 2024, which would give the firm a market capitalization of $1.3tn
This would put Tesla just behind Apple Inc (valued at $1.4 trillion) & Microsoft (valued at $1.37 trillion) among the world’s biggest companies.
But no company carries all the good news with itself. There have been doubts raised over Tesla’s stock as well.
Roth Capital analyst Craig Irwin told CNBC on Tuesday. “I just can’t believe this freaking stock. It’s insane,” “This is a big separation from those of us who like to pull out the calculators and look at reality.”
Wood told Barron’s Market Brief: “The electric vehicle is going to drop below the price of a gas-powered vehicle, like-for-like, within the next 18 months to two years, and then will continue to fall. So, it’s going to be a no-brainer.”
Various analysts believe that Tesla’s shares have been overvalued in a rush of optimism for a green electric car of the future.
JP Morgan analysts said: “We continue to urge caution with regard to Tesla shares, which appear highly overvalued based on our understanding of the fundamentals.”
Last week, Tesla reported a profit of $105 million for its 4th quarter and said it expected to increase sales by more than a third this year.
Elon Musk who owns 20% of Tesla’s shares said last week that Model Y will have 315 miles of range, which would far outstrip its competitors like Audi e-Tron and Porsche Taycan that comes with 200 miles range.
