Ferragu: TSLA Will Be More Valuable Than Apple, Microsoft, Google "Without Any Doubt"

Rob Maurer

After releasing a street-high $578 price target on TSLA stock last week, New Street Research analyst Pierre Ferragu joins Rob Maurer to discuss Tesla's position in the automotive market, TSLA's stock price, Battery Day, institutional investor sentiment, and more on Tesla. The full hour-long interview is included above, with timestamps below.

Notably, Maurer asked Ferragu if Tesla will ever become the most valuable company in the world. After some consideration, Ferragu responded.

"It's difficult to say. Alibaba and Amazon have massive leeway in terms of growing their businesses, so when Tesla is at $2T or $3T [in market cap], Amazon and Alibaba could be, actually, larger. But I think the stock will be larger than Apple, larger than Google, larger than Facebook, larger than Microsoft, without any doubt."

Apple's valuation currently sits at about $2.2T, more than five times Tesla's current valuation of $412B. Microsoft is valued at $1.7T, Google at $1.1T, and Facebook at $768B.

Ferragu expects Tesla to be the world's leading automaker by 2030, with potential to capture better margins than automakers have traditionally achieved.

For more, please see the included video and be sure to follow Tesla Daily on The Street.

Timestamps:

  • 0:00 Intro
  • 1:15 Sell-side analyst process and original price target
  • 4:50 Reseting TSLA framework
  • 9:09 Retail investor perception of analyst price target increases
  • 10:50 Valuing a company
  • 15:30 Tesla will outsell VW by 2030
  • 22:25 Solid state batteries
  • 25:15 Will there be contraction in the auto industry?
  • 28:54 Is China a risk for Tesla long-term?
  • 36:47 What are institutional investors currently thinking?
  • 40:39 Tesla's autonomous driving position
  • 46:45 Is TSLA the most exciting company to cover?
  • 49:39 S&P 500 inclusion?
  • 50:43 Tesla Energy
  • 55:15 Will Tesla ever be the most valuable company in the world?

---

Disclosure: Rob Maurer is long TSLA stock and derivatives.

Comments (3)
No. 1-3
PluviAl
PluviAl

No, TSLA is in deep bubble land. Not even Dumbo could float for ever on bubbles. It's a race to the bottom, while expanding the top, that's Tesla; it feels a lot like Mazda's failed venture into ICE expansion: Mazda never really recovered. Any manufacturer can build a pretty good electric car. Whereas an ICE engine platform costs about US $1B. An electric motor can be pulled off the shelf, with reasonable performance. Further, the performance of electrics is never going to be as extensive as ICE, so hybrids will be far better for all-around vehicles as we like for suburbs and exurbs, where cars and trucks are essential. TM understands this and is only backing into all electrics, they have the best hybrids, and will as long as others don't put billions into development to catch up. This is a long way to say buy NIO, GELY, (not yet NIKOLA, and GM, F, before you venture further into TSLA, it's way, way, over-priced. Look at Tesla cars limping and struggling to reach destinations on I5 and I15 to see what I mean.
This venture into self-driving is going to crash their finances, and the benefit of their work will go to other's, especially the Chinese competition, where the liability for mistakes is far cheaper. Because, you can't patent the acceptance of the technology, but the cost and liability will go to the innovators.

PluviAl
PluviAl

No. It's a race to the bottom, while expanding the top, that's Tesla; it feels a lot like Mazda's failed venture into ICE expansion: Mazda never really recovered. Any manufacturer can build a pretty good electric car. Whereas an ICE engine platform costs about US $1B. An electric motor can be pulled off the shelf, with reasonable performance. Further, the performance of electrics is never going to be as extensive as ICE, so hybrids will be far better for all-around vehicles as we like for suburbs and exurbs, where cars and trucks are essential. TM understands this and is only backing into all electrics, they have the best hybrids, and will as long as others don't put billions into development to catch up. This is a long way to say buy NIO, GELY, (not yet NIKOLA) and GM, F, before you venture further into TSLA, it's way, way, over-priced. Look at Tesla cars limping and struggling to reach destinations on I5 and I15 to see what I mean. There are dozens of new offerings on the way which will be as good or better than TSLA.
This venture into self-driving is going to crash their finances, and the benefit of their work will go to other's, especially the Chinese competition, where the liability for mistakes is far cheaper. Making Electrics palatable benefits all players, and their share of the pie will grow while TSLA's shrinks like VW once controlled 60% of small car market, then lost almost all of it.
The self-driving development cost will be born by innovators, but with little that can be patented: you can't patent people's and government's attitude. TSLA pays and all players benefit. Worth as much? no, not ever even close. We are way out in bubble land. Even Dumbo could not float for ever on bubbles.

Steinmetz
Steinmetz

Great interview with Pierre! The thick accent made understanding some of what he was saying difficult, but his insight is illuminating.