Their market cap already has them priced as a leader.
There seems to be this weird perception with Tesla that the company doing well = stock price goes up. As if the 400+bn market cap doesn’t already imply massive growth and perfect execution. No one projecting the massive valuations in X year(s) goes on to explain where the earnings growth to support these is going to come from.
Anyway as usual /r/wsb has high quality discourse on this topic (even in the last 24H). Admittedly the OP is pretty terrible quality (and I don’t agree with the logic) but the responses do highlight the sentiment around Tesla:
Current price is not based on actual expected earnings, but expected likelihood of other people being willing to buy the stock for higher later. In other words, “growth stocks” are probably better referred to as “speculative stocks.” As in, players are betting against each other’s psychological propensity rather than anything to do with the numbers. Or even more simply, we are betting on how good Tesla’s marketing is, and how charismatic its leaders are.
I think the problem here is that the explosion in their value has never been based on fundamentals so saying that fundamentals will bring them down is just betting on when this bubble pops. Obviously the valuations are retarded but betting on when that pops is the million dollar question.
My very limited understanding is not so much that the bubble will pop but rather tsla and zoom are expected to underperform the market. Eventually they may justify their market cap but its so inflated right now that it will take time. People buying hype will run out of money and people making 5% on bank dividends aren’t going to start buying TSLA now.
I don’t like betting against Tesla. I agree they are overvalued. but I think betting against them is a losing game with their cult-like fanbase. Tesla also has great products and is an early, well established player in the clean energy market which is heavily subsidized and set for MASSIVE growth over the next decade.
Tesla is a battery company.
So why aren’t we breaking down the door and piling into Panasonic? Leftover resentment from Pearl Harbor?
Although I think Tesla will do well I won’t touch the stock (outside of index funds) and I would never have the confidence to have a 60% Tesla portfolio (or any single stock above about 10% to be honest).