Gene Munster: Tesla could be a $2.5 trillion company

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Oct 29, 2021
  • Loup Ventures' Gene Munster sees more room for upside in Tesla Inc.
  • Tesla bear Gordon Johnson says the numbers don't support the bullish case.
  • Shares of the EV maker are up more than 40% since the start of the month.

Shares of Tesla Inc (NASDAQ: TSLA) are up more than 40% this month, but Loup Ventures’ Gene Munster says there’s still room for upside.

Munster’s bullish case for Tesla Inc

Tesla recently joined the trillion-dollar club after Hertz placed an order for 100K electric vehicles. According to Munster, however, the EV maker could more than double its market cap to $2.5 trillion. On CNBC’s “Squawk Box”, he said:

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In five years, granted it’s a ways away, but Tesla can go from $70 billion to $400 billion in revenue, a six and a half multiple on that, which is hardware software services Apple-like multiple, is that $2,500 stock. So, I think there’s still room for upside with Tesla.

Munster doesn’t see the auto industry at large as undervalued and agrees that some companies like Ford will come out stronger as they shift to electric, but many, he warned, will struggle with the transition and end up at “a fraction of what they are, in a decade”.

GLJ Research’s Gordon Johnson disagrees

On the contrary, GLJ Research’s Gordon Johnson continues to be dovish on Tesla. He’s even sceptic about the Hertz news as the terms of the deal have not been detailed to the public.

When an automaker sells cars to a rental fleet, from an automotive perspective, it’s done from a point of weakness, not strength. So, I think they do have demand problems that will play out through 2022. They have no new cars and a ton of competition coming.

Johnson highlighted that Tesla is already losing market share around the world when the competition is in its early years only.

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