Two of the leading investors on Wall Street believe Tesla’s stock valuation has nowhere to go but up.
Key Details
- Tesla’s stock has improved immensely in the past six months, rallying in late May and June—increasing value by 55.9% year-to-date.
- The company’s market capitalization is roughly $200 billion.
- ARK Invest CEO Cathie Wood predicted last month that Tesla would annually gross $10 trillion in revenue by 2030.
- Baron Capital founder Ron Baron tells CNBC’s Squawk Box that he believes Tesla’s value will skyrocket six-fold by 2030.
- Baron owns 5 million shares of Tesla and was an early investor in the innovative electric-vehicle company, having invested $380 million and grossed $4 billion in the time since, The Street reports.
Why It’s Important
These predictions are good news for Tesla, which started the year off on the wrong foot. Tesla’s investors sounded the alarm in December with concerns that the CEO’s social-media experiments were too much of a distraction. These fears were partially confirmed when the company suffered a 69.1% value drop in early January after reports that the company would not meet its growth targets. Subsequently, the value of used Teslas began to drop precipitously.
Several months of more positive developments have boosted confidence in the company, with the White House signing a deal with the company to expand access to its nationwide charging station network to other electric vehicle brands.
It is no surprise that Cathie Wood is optimistic about Tesla. The popular Wall Street investor is heavily invested in CEO Elon Musk’s success, once owning 1.3 million shares. She has repeatedly defended his decisions with Tesla and Twitter, publicly praising his visionary ideas and leadership style at the recent Axios BFD Conference. However, the public advocacy from Baron comes as another useful note of praise amid ongoing trepidation about the future of the company.
Of course, these are two investors who benefit from Tesla stock rising. Many are not as bullish on TSLA—given that as more car companies get into the EV business, Tesla will no doubt lose market share, which does not necessarily reduce the share price but it could.
Notable Quote
“The stock is now $250, I think it’s going to be $500 in 2025, and I think in 2030, it’s going to be $1,500. That’s my target,” Baron tells CNBC. “We invested $380 million, and we made about $4 billion so far. We cashed in about a billion and a half. We now have 17.5 million shares, and I think we will make six or seven times that. I’m the last one to buy, and I will be the last one to sell. Last in, last out. I bought for the clients; we sold about a quarter of their stock. I haven’t sold a single share, personally.”
