The truth is Tesla stock is worth $3,600 (presplit) because TSLA performed two stock splits since 2020: A 5 to 1 split in 2021 and 3 to 1 split in 2022. Tesla’s market cap would have to 3x in order to reach $10,000, which could happen within the next 3 to 5 years.
Will Tesla Stock Reach $10,000 in the Future?
However, it’s unlikely that Tesla’s current stock price will reach $10,000 for several reasons:
- Tesla’s market cap would have to increase 50x to reach $10,000 (assuming no further stock splits in the future). That’s a $32 trillion dollar market cap, which is close to the entire US stock market value.
- Tesla would likely perform a stock split to keep the price lower and make it easier for options investors
- Tesla grew during the Covid-19 pandemic because the company was an early mover in the electric car industry. More competitors are coming into the industry, which makes it harder for Tesla to grow at the same speed.
- Tesla CEO Elon Musk sold over 7.9 million shares of Tesla stock in August 2022 to fund his purchase of Twitter. It’s not a good sign that Tesla’s CEO wants to diversify his holdings away from Tesla stock.
Tesla Stock Must 50x to Reach $10,000
Anything could happen but I don’t expect Tesla stock to reach $10,000 for a long time. A 50x gain could take 15 to 20 years at Tesla’s current revenue & earnings growth.
Tesla Has Performed 2 Stock Splits in the company’s history
A stock split is a bullish indicator for any publicly traded company because it shows that the stock price is getting too high for average retail investors. Tesla’s management decided to split the stock to lower the price without changing Tesla’s total market cap.
It’s unlikely that Tesla CEO Elon Musk wouldn’t perform another stock split in the future if Tesla stock continues climbing higher.
Tesla’s Competition is Getting Tougher
Tesla was an early mover in the EV space and that helped the company grow quickly. Things have changed and now companies such as Lucid Motors and Rivian are starting to produce high-end electric vehicles.
Legacy automakers such as GM, Volkswagon, and Ford are beginning to sell electric vehicles after a late entrance in the electric car market.
There are also Chinese electric car stocks such as Nio and Xpeng that could take market share from Tesla in the Chinese EV market.
Finally, there are several smaller EV companies such as Canoo and Arrival that will scale production in 2023.
That’s a lot of new competition that could hurt Tesla’s dominance in the future. Tesla is diversifying its product line with the Cybertruck, Tesla bot, and Tesla solar but it won’t be so easy to grow in the future like it was before.
Elon Musk Sold Tesla Stock to Buy Twitter. That’s Not Good
Finally, it’s never a good sign when a company’s CEO sells stock to purchase another company. That’s exactly what Elon Musk did in August 2022 to fund his purchase of Twitter. Elon Musk is a big fan of Twitter and has over 100 million followers,
When Elon Musk bought a 9% stake in Twitter, I was hoping he would stop there and focus more on his other companies such as Tesla, Starlink, and SpaceX. His attention is getting stretched thin with all his different CEO roles.
Now, Elon Musk wants to take Twitter private because he loves tweeting so much. This is a good move for long time Twitter shareholders because TWTR stock has done nothing since IPOing.
The problem is Tesla shareholders are not getting Elon’s full attention and that will hurt growth in the future.
Tesla will most likely be considered the best stock of this decade by 2030. The company fights climate change more so than any other corporation on the planet.
The problem is that Tesla must grow a lot more to reach $50,000 per share. It could happen but don’t expect hypergains anytime soon.