Is Tesla a $500.00 Stock? It’s Possible
A lot has changed in the past year, but my affection for Tesla Motors, Inc. (NASDAQ:TSLA) remains the same. Of course, my love for Tesla isn’t purely based on emotion; there are several reasons that I think Tesla stock is a winner.
I’ve followed Tesla through the peaks and valleys of its journey, and yet I still think that the stock has room to run. From its current level of $215.41, the stock could rise to $300.00, $400.00, or even $500.00. Here’s why.
From my vantage, Tesla has a bunch of tailwinds that go underappreciated. For instance, Tesla is developing new revenue streams that supplement their core business.
One such an avenue is the Tesla Powerwall.
Tailwinds for Tesla Stock
The Tesla Powerwall is a boon to the company stock—investors just haven’t realized it yet. It is a slim, elegant battery that can be hung on a garage wall to store electricity gathered by rooftop solar panels. TSLA stock could soar once businesses understand the commercial logic of controlling their own energy supply.
After all, the Powerwall isn’t just for individuals. The batteries can be stacked in any number, from two to infinity, depending on the needs of the business. Rather than pay utility companies, money will flow to Tesla’s coffers.
A lot of the conversation around Tesla stock is incredibly bearish right now. But wait for the Powerwall revenues to start rolling in, because they’ll change their tune on it soon enough. Wall Street is fickle that way.
Stock courtesy of www.StockCharts.com
Before you know it, hedge funds will be lining up for a piece of Tesla. In addition to the Powerwall, the advent of self-driving technology will help push Tesla stock higher.
I know a lot of firms, Apple Inc. and Alphabet Inc. included, are working on self-driving technology. There’s a key difference though. While most of its competitors in the space are either tech firms or car makers, Tesla is built on both in equal measure.
Let’s not forget that Tesla pioneered the luxury electric car. The Tesla Model S is thing of beauty; top of its class and built for car junkies. The onboard computer interface is another hallmark of the genius that characterizes the company. (Source: “With New Software Rollout, Tesla Accelerates Toward Fully Self-Driving Cars,” Re/Code, October 14, 2015.)
Tesla Stock Will Drive Higher on Autopilot
While other companies are busy figuring out the business end of driverless technology, Tesla is already there. One year ago, Tesla engineers started loading the Model S lineup with cameras, radar, and sensors. Then in October 2015, they updated Tesla software to include an autopilot function.
All of a sudden, Tesla drivers could let their car change lanes for them, even in traffic. More impressive than the advancements of driverless technology is the fact that Tesla uploaded the feature without calling in any cars for physical upgrades.
Tesla is a seamless blend of software and hardware working together. And it gets even better: the profits of Tesla vehicles get poured into an expansion plan for charging stations that in turn make it feasible for more people to buy a Tesla.
Ultimately, Wall Street will return to its bullish stance on TSLA stock. They turned bearish because of slightly delayed shipments of the Tesla Model X, but that is a slight bump on a very long road. Over the mid- to long-term, I haven’t lost an ounce of optimism for Tesla stock.