Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Tesla shares soar 40% after analyst says firm’s value could hit $1.3tn

Tesla shares soar 40% after analyst says firm’s value could hit $1.3tn

Carmaker is world’s second most valuable despite never having made an annual profit
Tesla shares have soared 40% in two days, after one US analyst predicted the electric carmaker could transform global transport and that its market value could soar to $1.3tn (£1tn) in less than five years.

Shares in the 17-year-old California company rose by 17% to $912 a share on Tuesday, giving Tesla a market value of $164bn – more than the $104bn combined value of Detroit’s big three: General Motors, Ford and Fiat Chrysler.

The share price surge on Tuesday came on top of a near-20% rise in the stock on Monday. It has now more than doubled since December, as the company has reported stronger-than-expected sales and analysts predict it will streak away from traditional car companies in the development of electric vehicles.

The extraordinary spike in the company’s value sets Elon Musk, Tesla’s maverick founder and chief executive, further on the path to collect up to $50bn in the largest corporate pay deal ever struck. Musk, who is already the world’s 22nd-richest person with a $41bn fortune, will collect the “staggering” bonus if Tesla becomes a $650bn company by 2028.

Tesla is now the world’s second most valuable car company behind Japan’s Toyota, which has a market capitalisation of $227bn. Tesla’s huge valuation is despite it selling just 367,200 cars last year, compared with Toyota’s 10.7m sales. Tesla has never made an annual profit, and lost $862m in 2019.

Despite this, bullish financial analysts reckon Tesla’s value will surge higher still. They expect the company to dominate the electric car market as global governments outlaw the sale of polluting cars. The UK on Tuesday announced that it would ban the sale of petrol, diesel and hybrid cars by 2035. Tesla is also expected to make billions from fleets of self-driving autonomous taxis.

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 capitalisation of $1.3tn. That would put Tesla behind only Apple (currently worth $1.4tn) and Microsoft ($1.37tn) among the world’s biggest companies.

According to ARK, the possibilities could be even greater: its $7,000-a-share price target is only a “base case”. The firm’s “bull case” predicts a price as high as $15,000. In the firm’s worst “bear case” scenario the shares are still expected to rise to $1,500.

However, other analysts are highly sceptical of ARK’s calculations and projections. “I just can’t believe this freaking stock. It’s insane,” the Roth Capital analyst Craig Irwin told CNBC on Tuesday. “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. ”

ARK said it expects electric vehicles to account for about one-third of all car sales within the next five years, and Tesla would dominate the market. In its worst-case scenario Tesla is expected to sell 3.2m cars a year by 2024, and 7.1m in the best case.

James Anderson, a partner at Baillie Gifford, the Edinburgh-based fund manager that is one of Tesla’s largest outside investors, said: “We’re thrilled with their progress, delighted that our patience seems to have paid off – and, far from least, extremely happy that electric is beating carbon.”

Anderson had been mocked by some when a year ago he predicted: “There is now quite a large and growing possibility that Tesla will be the most valuable company in the world.”

Gene Munster, a managing partner of the venture capital firm Loup Ventures, said: “The thesis for Tesla’s business miracle is rooted in the handful of years that the company operated with effectively no competition.

Tesla has nearly a decade head start in EVs [electric vehicles] as other automakers under-invested in the space,” he wrote in a research note.

However, other analysts fear that Tesla has been overvalued in a rush of optimism for a green electric car 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.” The Wall Street bank’s target price for the end of the year is $240.

Many in the financial markets are also hoping to profit from a fall in the company’s share price by short-selling the stock. According to data analysts S3 Partners, 18% of Tesla’s shares are controlled by short-sellers – more than any other US stock.

Tesla last week reported a $105m profit for the fourth quarter and said it expected to increase sales by more than a third this year. The Silicon Valley carmaker said it expected the first deliveries of its next car, the Model Y sports utility vehicle, before April. The company had previously targeted production to begin by the summer.

Musk, who owns 20% of Tesla’s shares, said last week that the Model Y will have 315 miles (507km) of range, which would far outstrip its competitors the Audi e-tron and Porsche Taycan, which have estimated ranges of just over 200 miles.

The Volkswagen chief executive, Herbert Diess, last month told his top lieutenants that cars will “become the most important mobile device”. “If we see that, then we also understand why Tesla is so valuable from the view of analysts.”
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Elon Musk Unveils Grokipedia: An AI-Driven Alternative to Wikipedia
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
US Administration Under President Donald Trump Reportedly Lifts Ban on Ukraine’s Use of Storm Shadow Missiles Against Russia
White House Announces No Imminent Summit Between Trump and Putin
China Presses Netherlands to “properly” Resolve the Nexperia Seizure as Supply Chain Risks Grow
Merz Attacks Migrants, Sparks Uproar, and Refuses to Apologize: “Ask Your Daughters”
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
Ex-Microsoft Engineer Confirms Famous Windows XP Key Was Leaked Corporate License, Not a Hack
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
Wave of Complaints Against Apple Over iPhone 17 Pro’s Scratch Sensitivity
Munich Airport Reopens After Second Drone Shutdown
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
×