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For the past three years, Tesla’s stock price has been on an incredible run. From January 2019 until now Tesla’s stock price has gone from around $60 a share to over $1000. This means a Tesla investor who bought $1000 worth of the EV maker’s stock has seen his/her investment grow 16 folds to $16,000.
In comparison, the S&P 500 (an index that comprises 500 of the largest publicly traded US companies) in the same 3 years span has seen a 90% return. This means, in the last three years Tesla has outperformed the market by more than 17 times.
Tesla’s incredible rise has created so much wealth for the EV maker’s early investors and at the same time has delt tens of billions of dollars in losses for those who bet Tesla’s stock price will go down by shorting the EV maker’s shares.
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And still, despite the incredible rise in Tesla’s stock price, many believe the Austin, Texas EV maker is just getting started.
The most famous of these Tesla bulls is ARK Invest and CEO Cathie Wood. ARK Invest currently has a 2025 Tesla price target of $3000 per share. If ARK’s prediction comes true, it will be a further 3 times growth in Tesla’s stock price in the next 3 years.
That means the same $1000 invested in Tesla stock back in 2019 will be worth $50,000 by 2025. And Tesla will increase its already incredible $1 trillion valuation to $3 trillion. In comparison, the second-highest valued automaker in the world, Toyota, currently has a $300 billion valuation.
ARK Invest currently has the highest Tesla price target on Wall Street however, ARK Invest is far from the only financial firm/investor which is expecting continued incredible growth for Tesla stock.
However, at least in the short term, there have started to emerge signs Tesla CEO Elon Musk is not one of them. Musk has on multiple occasions said Tesla’s stock price is too high, nevertheless, the EV maker’s shares have continued to rise and Musk looks to have made his peace with this fact.
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Currently, Musk’s reservation with Tesla’s stock price has less to do with the performance of the EV maker he founded but rather with the broader stock market and economy at large.
Last month Musk asked when he thinks the next recession will be, replied saying “my gut feel is maybe around spring or summer 2022, but not later than 2023”. And if there is going to be a worldwide recession it is easy to imagine Musk doesn’t think Tesla’s stock price will fare any better.
Predicting macroeconomics is challenging, to say the least. My gut feel is maybe around spring or summer 2022, but not later than 2023.— Elon Musk (@elonmusk) December 30, 2021
And today Musk has dropped another hint that can arguably be interpreted as him calling a stock market top, which would also mean a Tesla stock price top. In his latest tweet Musk simply shared an emoji with an upward-pointing arrow and the word “Top”.
— Elon Musk (@elonmusk) January 15, 2022
It is common in financial jargon to call the highest peak a stock reaches before a downward reversal a “top”. As a result, I have interpreted Musk’s latest tweet as him once again warning of a recession ergo saying Tesla’s stock price with the broader stock market has reached the top.
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Admittedly, Musk’s tweet is too vague to draw any concrete conclusions. Given the upside pointing arrow, there are some who have even taken the exact opposite point of view and interpreted Musk’s tweet as him saying Tesla’s stock price is going even higher.
Given the 2018 settlement with the SEC, Musk’s tweets are at increased scrutiny as a result it’s unlikely we will hear from him unequivocally stating Tesla’s stock price has reached its peak, at least until the next recession passes.
However, we will be sure to keep you posted if we get further information from the Tesla boss regarding the EV maker’s stock price. Make sure to visit our site torquenews.com/Tesla regularly for the latest information.
So what do you think? Is Musk’s tweet is saying Tesla’s stock price has reached its peak or on the contrary do you think he’s pointing to further growth? What’s your personal prediction for Tesla shares in 2022? Let me know your thoughts down in the comments below.
Image: Courtesy of Tesla, Inc.
For more information check out: Ford F-150 Lightning EV vs Chevrolet Silverado EV RST A Battle of Numbers Also, see Tesla Fremont Production at Full Throttle
Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.
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