Renowned billionaire investment manager Ron Baron, a well-known supporter of Tesla, recently shared his belief that Tesla’s market capitalization could reach $4 trillion. And Elon Musk agrees.
Baron made his prediction on November 1 during an appearance on MarketWatch. A $4 trillion valuation would be more than six times Tesla’s current value.
In an earlier media appearance in September, Baron projected that Tesla’s share price would exceed $1000 by 2030. As of the time of writing, Tesla shares are selling for $218.51.
Interestingly, Baron initially had doubts about Tesla CEO Elon Musk’s mission to popularize electric vehicles. However, after conducting extensive research, he became convinced of Musk’s ability to succeed.
In 2014, Baron invested nearly $400 million in Tesla. According to TheStreet, Baron has made approximately 20 times his initial investment, profiting over $5 billion so far.
When pressed about his investment rationale, Baron emphasizes the unique characteristics of Tesla. He firmly believes that the company is not simply an automobile or battery manufacturer but rather an integral part of the future of transportation, on par with Intel’s role in computers.
Baron firmly asserts that Tesla’s competition will struggle to replicate what the company has achieved.
In a recent tweet, Elon Musk said that Baron’s projection is realistic. According to Musk, Tesla can become a $4 trillion company if it knocks the ball “out of the park” in its upcoming projects.
Musk’s outlook aligns with his previous bullish statements during Tesla’s second-quarter earnings call in July.
Cathie Wood of Ark Invest, a firm devoted to autonomous driving technology, shares a similarly optimistic view of Tesla’s value. Wood is even more optimistic about Tesla than Baron. She projects that by 2027, Tesla’s share price could reach $2,000, a nearly tenfold increase from its current value.
However, other investors are warning that Tesla’s best days are behind it.
Jim Chanos, a renowned investor famous for predicting the collapse of Enron, told CNBC in September that Tesla is “ridiculously overvalued.” As evidence, Chanos cited Tesla’s Full Self-Driving software. In court cases earlier this year, Tesla has admitted that Full Self-Driving doesn’t actually mean that its cars can drive themselves.
According to Chanos, Tesla’s reputation will suffer substantial damage as the company fails to deliver on other promises.
Image Source: Joe Rogan, https://shorturl.at/bEV19