The CEO of investment firm DoubleLine Capital said he finds Tesla "fascinating," particularly in the "cultish" devotion it inspires in investors and customers. However, he notes his suspicion over its $22.3 billion market cap, given competitors General Motors (GM) and Ford Motors (F) continue to hit record highs.
"There's something wrong with this picture," he said, noting the car sales have to come from somewhere.
Shares of the electronic car manufacturer are down 0.4% to $182.82 as of 1 p.m. ET. Year to date, shares of the electric auto maker have gained 441.1%, far exceeding the S&P 500 21.14% gain.
Regarding Google, Gunlach said he remains wary of a company with a market cap of $297.5, billion trading at 24 times forward earnings. He recommended the company be "harvested" for capital gains.
As for the iPhone manufacturer, Gundlach said shares remain a safety purchase rather than a moneymaker, especially given Apple's current share price above $500.
Apple shares gained 0.7% to $504.62 while Google was off 0.54% to $893.15 as of 1 p.m. ET.
TheStreet Ratings team rates Tesla Motors Inc as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate Tesla Motors Inc (TSLA) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been poor profit margins."