Just recently, Baird analyst Ben Kallo came out with his ‘blue-sky’ forecast about Tesla (NASDAQ:TSLA), saying that if the company plays their cards right — meeting their production, launch goals and all — the name’s price-per-share [pps] can reach as high as $566 by 2020.
Just a few days later, here comes another analyst making an even bigger claim by suggesting that ‘Tesla could be the next Amazon.’
This bold prediction came from Gene Munster, previously a Piper Jaffray tech analyst, well-known for his accurate predictions about Cupertino tech giant Apple, now an investment specialist who is also co-founder and a managing partner of Loup Ventures.
As he told CNBC during a recent session of ‘Squawk on the Street‘, going beyond being just an electric car maker, Tesla’s mission and ambition to speed up global transition to renewable energy will make possible for the company to grab a significant share of the market, not from the automobile industry, but from the energy providers.
Yet Amazon shares are now trading at an all-time high — nearly $1,000 per share, while TSLA is just at around $322 per share. That’s obviously a significant difference pps-wise by almost 700 points. So the question is: how in the world will Tesla be able to catch up with that price level?
Munster says there’s some kind of similarity between Amazon and Tesla. In the beginning, Amazon was ‘just selling books’. But it has now branched out way beyond that niche. We’re talking about more than just online selling of anything and everything under the sun. Amazon has opened its own brick-and-mortar stores; is now gaining its own share of cloud computing customers, crushing competition through its ‘Amazon Web Services’ platform; has expanded its delivery services by making use of various channels including drones and their own ‘Uber-like’ service — Amazon Flex; the e-commerce giant is currently in the midst of working their way to become completely autonomous in their delivery system– relying on no one else but their own fleet. And let’s not forget here the fact that Amazon also has its own products that are bestsellers in their own right. We’re referring, of course, to the Amazon Echo and Echo Dot.
On the other hand, and just like Bezos’company who initially sold just books, Tesla may also have started as ‘just’ an electric car maker. Now of course, the company isn’t just aiming to make people shift to a different type of transportation. Their objective it’s also aligned with one of the world’s most pressing needs — the shift to clean and renewable energy. And if investors are as concerned about the environment and as committed as Tesla and its CEO is in helping the world make that transition, maybe the electric car maker and its shares will continue making higher highs and in the process accomplish their noble mission.
While not everyone shares the same positive outlook about Elon Musk’s venture, Munster has this to say: “I would, pun intended here, buckle up. This is going to be a bumpy but positive ride for Tesla in the years to come.”
Buckle up indeed shorters. It seems another massive squeeze might be coming your way.
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Just an fyi: Share price alone does not represent the gap between AMZN & TSLA: it’s the market cap. So gap is ~$475bn versus ~$55bn, not $1000 vs. $322.