Despite some recent volatility, Tesla’s (TSLA) stock remains a “must own” for investors, says Melius Research.
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Analyst Rob Wertheimer writes in a new research report that autonomous driving is fast approaching a tipping point that could trigger one of the biggest value shifts in modern industrial history, with Tesla a clear beneficiary of the change.
Wertheimer writes that Tesla’s stock is a “must own” because “the world is about to change, dramatically.” The analyst at Melius, an independent research and investment firm, quotes author Ernest Hemingway when he says the technological change will occur “two ways, gradually, then suddenly.”
Tesla’s Strengths
Wertheimer adds that self-driving vehicles are nearing the moment when years of incremental progress suddenly give way to mass adoption, transforming into “a $7 trillion dollar sector.” He adds that, “our point is not that Tesla is at risk, it’s that everybody else is.”
Melius is so bullish on TSLA stock that it predicts, within the next five years, the company “will see hundreds of billions in value shift…” The catalyst for Tesla’s stock that Melius says investors should watch for is the accelerating improvement in Tesla’s full self-driving software. He also expects big things from Tesla’s training compute and the company’s upcoming AI5 microchip.
Is TSLA Stock a Buy?
The stock of Tesla has a consensus Hold rating among 34 Wall Street analysts. That rating is based on 14 Buy, 10 Hold, and 10 Sell recommendations issued in the last three months. The average TSLA price target of $383.37 implies 7.50% downside from current levels.
