One “Magnificent Seven” stock fell 52% to buy and hold forever.
One “Magnificent Seven” stock fell 52% to buy and hold forever.
Saturday, March 2, 2024 at 10:03 AM EST
Over the past year or so, “Magnificent Seven” stock dominated the market headlines. These big tech backbone forces, often worth more than a trillion dollars each, have collectively destroyed the wider market.
However, “Magnificent Seven” member Tesla (NASDAQ: TSLA) is a notable exception. The stock has remained almost flat over the past 12 months, falling more than 50% from its high.
It might be counterintuitive to chase cold traded stocks, but Tesla's fall is probably the best buying opportunity out of all the “grand seven” stocks today. That's why investors should consider buying a Tesla and never let go.
First... check the electric car slump
Broadly speaking, electric cars are now in a huge slump. Traditional car companies such as Ford and GM have stepped on the brakes on electric vehicle upgrades, while newer electric vehicle companies such as Rivian and Lucid are publishing soft guidelines for 2024. But will this affect everyone, Tesla included?
Tesla's sales in 2023 are 38% higher than in 2022, which is an impressive increase considering Tesla's sales volume of 1.8 million units a year. It is difficult for its rivals to increase their base by tens of thousands or less. So, maybe it's fair to say Tesla isn't struggling like others.
Furthermore, research shows that Tesla is making progress in terms of total market share in the US. Tesla's share of all car brands increased from 3.8% to 4.2% in 2023, according to data from Cox Motors and its subsidiary Kelly Blue Book.
Tesla did warn that 2024 unit growth could take a step backwards as the company prepares a potential new car, as well as a new manufacturing system. CEO Elon Musk also commented on the impact of higher interest rates on consumer demand. Sure, investors will want to see how this develops, but today it's hard to say Tesla's electric car brand is in decline.
Saturday, March 2, 2024 at 10:03 AM EST
Over the past year or so, “Magnificent Seven” stock dominated the market headlines. These big tech backbone forces, often worth more than a trillion dollars each, have collectively destroyed the wider market.
However, “Magnificent Seven” member Tesla (NASDAQ: TSLA) is a notable exception. The stock has remained almost flat over the past 12 months, falling more than 50% from its high.
It might be counterintuitive to chase cold traded stocks, but Tesla's fall is probably the best buying opportunity out of all the “grand seven” stocks today. That's why investors should consider buying a Tesla and never let go.
First... check the electric car slump
Broadly speaking, electric cars are now in a huge slump. Traditional car companies such as Ford and GM have stepped on the brakes on electric vehicle upgrades, while newer electric vehicle companies such as Rivian and Lucid are publishing soft guidelines for 2024. But will this affect everyone, Tesla included?
Tesla's sales in 2023 are 38% higher than in 2022, which is an impressive increase considering Tesla's sales volume of 1.8 million units a year. It is difficult for its rivals to increase their base by tens of thousands or less. So, maybe it's fair to say Tesla isn't struggling like others.
Furthermore, research shows that Tesla is making progress in terms of total market share in the US. Tesla's share of all car brands increased from 3.8% to 4.2% in 2023, according to data from Cox Motors and its subsidiary Kelly Blue Book.
Tesla did warn that 2024 unit growth could take a step backwards as the company prepares a potential new car, as well as a new manufacturing system. CEO Elon Musk also commented on the impact of higher interest rates on consumer demand. Sure, investors will want to see how this develops, but today it's hard to say Tesla's electric car brand is in decline.
1. Tesla CEO Elon Musk responds about the gross profit comparison between Tesla Bikes and BYD:
Tesla's gross profit from bicycles is 7,000 US dollars, BYD is 1,300 US dollars, NIO Auto is negative 35,000 US dollars, Ford is negative 36,000 US dollars, Rivian is negative 46,000, and Lucid is negative 377,000 US dollars. Tesla's gross profit far exceeds that of BYD. Despite Tesla's price cut by around 35%, they're still in the lead (and probably forever). I can't find brands like VW, Toyota, Hyundai, etc.
Tesla's gross profit from bicycles is 7,000 US dollars, BYD is 1,300 US dollars, NIO Auto is negative 35,000 US dollars, Ford is negative 36,000 US dollars, Rivian is negative 46,000, and Lucid is negative 377,000 US dollars. Tesla's gross profit far exceeds that of BYD. Despite Tesla's price cut by around 35%, they're still in the lead (and probably forever). I can't find brands like VW, Toyota, Hyundai, etc.
2. The Tesla mobile app launched an AI chat assistant. On Tuesday local time in the US, Tesla added a new artificial intelligence chat assistant to the phone's software update. This one, called “Tesla Assistant Beta,” can answer questions about existing Tesla products registered in the app, or other Tesla products.
3. Tesla showcased the second-generation humanoid robot Optimus focusing on industry chain opportunities. On February 24, Tesla posted a new video on social platform X showing the smooth walking ability of Tesla's second-generation humanoid robot Optimus. Compared to the video posted a few weeks ago, the Optimus shown this time seems to be an updated or more complete version. It has a more steady pace and smoother movement during walking, which is closer to humans.
4. Elon Musk's emphasis on robots has increased markedly this year, and the performance conference also mentioned “robot progress will be released from time to time.” Earlier, Elon Musk said during the earnings call that Tesla plans to ship the first batch of humanoid robots, Optimus, in 2025. The mass production schedule is gradually clear. 2024 is expected to usher in component molding and supplier targeting. The humanoid robot industry chain will usher in opportunities. The humanoid robot development will accelerate, and technology upgrades, product launches, and industry chain verification will continue to emerge.
5. In the US, and especially on Wall Street, BlackRock and Vanguard are the real rulers of the US government. In the US and Western countries where the separation of powers plus public opinion supervision and one-person, one-vote universal suffrage system is a bit exaggerated, but their influence should definitely not be underestimated. As long as they recognize something, there's nothing they can't do. Tesla's holdings were increased after Tesla's stock price continued to fall sharply, and it happened at the end of 2023 and the beginning of 2024. The time is so close to now, which itself shows the attitude and views of these two top investment giants.
6. Now let's talk about Renaissance Technologies LLC (Renaissance Technologies LLC), which is headed by James Harris Simons as the chairman of the board. Their level of research on the medium to long term is self-evident (surprisingly consistent — bullish), and their research on short-term markets has reached a very accurate level. The level of short-term trading is also excellent, as if it were a large bomber with a heavy driver doing aerial combat. Most importantly, Renaissance Technologies LLC (Renaissance Technology) increased its Tesla stock holdings, which was astonishing: 1.838,400 shares, and the increase in holdings reached 457 million US dollars. Renaissance Technologies LLC (Renaissance Technologies LLC) is the first in the US and the world to be founded by the world's top mathematician James Harris Simons, that is, a group of theoretical physicists, mathematicians, statisticians, economists, and computer software engineers to form a super luxury camp, using mathematical physical models and quantitative analysis and big data analysis and processing, with large-scale high-speed computers and optical fiber communication channels directly connected to the New York Stock Exchange Carrying out high-frequency arbitrage investment transactions has raised the accuracy of investment transactions to an unbelievable level, putting the stock god Warren Buffett, financial magnate George Soros, and world hedging arbitrage and safe-haven master Michael Steinhardt, or Michael Steinhardt, all dwarf investment and trading giants.
Renaissance Technologies LLC also increased Tesla's holdings at the end of 2023. That in itself explains their views and attitudes.
Renaissance Technologies LLC also increased Tesla's holdings at the end of 2023. That in itself explains their views and attitudes.
7. Bridgewater Associates (Bridgewater Fund, the world's largest hedge fund, with assets under management of approximately US$138 billion), led by Raymond Thomas Dalio (August 8, 1949—) I'm not optimistic about Tesla's future growth.
The future looks high-tech
The long-term leadership of electric vehicles is arguably a good reason to own Tesla stock. Still, the company's nascent long-term catalyst could improve return on investment over the next decade. The long-term value of Tesla stock comes down to three key projects: the fully automated driving software Cybertruck and Tesla's humanoid robot Optimus.
Fully automated driving (FSD) has been in development for over a decade, and the long time frame may give the impression that it will never come. This may be technically true, but advancements in recent years have also brought huge improvements, including the latest version of FSD, beta 12. Improving FSD can be said to change Tesla's entire trajectory.
Cybertruck recently began its first deliveries and made Tesla its first passenger pickup truck, bringing Tesla to a whole new customer base. There are an estimated 2 million bookings today. While not all orders turn into orders, it shows interest in Tesla's unique truck design.
Finally, Tesla is developing a humanoid robot to handle simple manual labor. A commercial launch isn't imminent, but Tesla did recently show a video of the prototype walking through the lab, a clue to the robot's already impressive capabilities. Amazon founder Jeff Bezos and Nvidia are funding a competing startup that appears to be validating a potential market for humanoid robots.
Today, the stock's forward price-earnings ratio is 61, and analysts believe earnings will grow an average of 22% per year over the next three to five years. Tesla isn't cheap at this price, but 50% of hairstyles at least make the stock's price tag easy to digest. Tesla is known for its bold ambitions and hasn't delivered on all of its promises for years.
Meanwhile, the stock crushed the market because Tesla did a great deal when it did deliver. The nature of this turbulence seems unlikely to change as long as Elon Musk heads the company. Long-term investors will have to accept this to be comfortable buying and holding stocks, but there's no doubt that the next few years have enough iron to create more magic.
Where to invest $1000 now
When our team of analysts has stock tips, they can pay to listen to them. After all, their 20-year newsletter, Motley Fool Stock Advisor, has more than tripled the market. *
They just revealed what they think investors can buy now... Tesla is on the list—but you've probably overlooked 9 other stocks.
*Stock advisors return as of February 26, 2024
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a board member of The Motley Fool. It has no place in any of the stocks mentioned above. The Motley Fool has jobs and recommends Amazon, Nvidia, and Tesla. The Motley Fool recommends GM and recommends the following options: Give GM a $25 phone in January 2025. Mortley Fool has one.
Originally published by The Motley Fool
The long-term leadership of electric vehicles is arguably a good reason to own Tesla stock. Still, the company's nascent long-term catalyst could improve return on investment over the next decade. The long-term value of Tesla stock comes down to three key projects: the fully automated driving software Cybertruck and Tesla's humanoid robot Optimus.
Fully automated driving (FSD) has been in development for over a decade, and the long time frame may give the impression that it will never come. This may be technically true, but advancements in recent years have also brought huge improvements, including the latest version of FSD, beta 12. Improving FSD can be said to change Tesla's entire trajectory.
Cybertruck recently began its first deliveries and made Tesla its first passenger pickup truck, bringing Tesla to a whole new customer base. There are an estimated 2 million bookings today. While not all orders turn into orders, it shows interest in Tesla's unique truck design.
Finally, Tesla is developing a humanoid robot to handle simple manual labor. A commercial launch isn't imminent, but Tesla did recently show a video of the prototype walking through the lab, a clue to the robot's already impressive capabilities. Amazon founder Jeff Bezos and Nvidia are funding a competing startup that appears to be validating a potential market for humanoid robots.
Today, the stock's forward price-earnings ratio is 61, and analysts believe earnings will grow an average of 22% per year over the next three to five years. Tesla isn't cheap at this price, but 50% of hairstyles at least make the stock's price tag easy to digest. Tesla is known for its bold ambitions and hasn't delivered on all of its promises for years.
Meanwhile, the stock crushed the market because Tesla did a great deal when it did deliver. The nature of this turbulence seems unlikely to change as long as Elon Musk heads the company. Long-term investors will have to accept this to be comfortable buying and holding stocks, but there's no doubt that the next few years have enough iron to create more magic.
Where to invest $1000 now
When our team of analysts has stock tips, they can pay to listen to them. After all, their 20-year newsletter, Motley Fool Stock Advisor, has more than tripled the market. *
They just revealed what they think investors can buy now... Tesla is on the list—but you've probably overlooked 9 other stocks.
*Stock advisors return as of February 26, 2024
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a board member of The Motley Fool. It has no place in any of the stocks mentioned above. The Motley Fool has jobs and recommends Amazon, Nvidia, and Tesla. The Motley Fool recommends GM and recommends the following options: Give GM a $25 phone in January 2025. Mortley Fool has one.
Originally published by The Motley Fool
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