Tesla, Inc. (NASDAQ:TSLA) shareholders are placing all their chips on CEO Elon Musk, betting their hopes and dreams on his ability to lead the company toward an $8.5 trillion market cap.
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Only time will tell whether this was a wise decision, but the market seems to be on the fence regarding the hefty wager. TSLA has traded mostly sideways since shareholders voted overwhelmingly in favor of Musk’s massive compensation package last week, suggesting ambivalence regarding the move.
Top investor Victor Dergunov has no such qualms, and he is firmly on board the Musk express. In fact, the 5-star investor believes that any future dips could serve as a lucrative window to purchase more TSLA shares.
“While I increased my long-term Tesla position on the recent pullback, I believe we could see an even better buying opportunity ahead,” explains Dergunov, who is among the top 3% of stock pros covered by TipRanks.
Dergunov is encouraged by Tesla’s recent performance, noting the record number of deliveries in Q3 and the refresh of its more popular vehicles. He’s not too concerned about the expiration of the $7,500 EV tax credit either, arguing that Tesla still offers the best value for consumers.
However, the real crux of the investor’s thesis rests upon Tesla’s more technological ambitions, including full self-driving, AI, big data, and robotics. In fact, Dergunov cites the Chair of Tesla’s Board of Directors, who recently claimed that the company stands at the cusp of the largest value-creation event “quite possibly in the history of humanity.”
Bold words, and Dergunov is buying.
“Do you want to go along for the ride here, invest in Tesla, and potentially watch your investments grow into the most valuable company in history?” asks Dergunov.
The investor does acknowledge there could be some bumps along the way, even suggesting a 15% to 20% pullback could be on Tesla’s near-term horizon. Dergunov also points out that much depends on Musk’s engagement, as there is always the risk that the CEO could shift his attention elsewhere.
“Despite my bullish outlook, Tesla may not be a suitable investment for everyone,” cautions Dergunov, who nevertheless rates TSLA a Strong Buy. (To watch Victor Dergunov’s track record, click here)
Wall Street is conflicted regarding TSLA. With 14 Buys, 10 Holds, and 10 Sells, TSLA carries a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $382.54 implies a downside in the low double digits. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.