Tesla's shares are up over 70% this year. One market pro is bullish — but another isn't convinced
Two investors debate whether Tesla's stock will continue to rise after a 65% drop in 2022.
After a steep decline of 65% in 2022, Tesla's shares have increased more than 70% this past year. This is the largest annual increase in Tesla shares. Investors are flocking to Tesla, the EV darling due to rising demand for growth stocks and signs that EV demand is rebounding. However, there's a possibility of more price cuts. Is it the right time to purchase the stock? CNBC's "Street Signs Asia" featured two investors. Ross Gerber is the president and CEO at Gerber Kawasaki Wealth Management. Gerber is a fervent Tesla fan. He believes that Tesla is the global leader in sustainable transportation and energy. He said that Tesla is the only company whose sole focus is on sustainable transportation and energy. It's just the beginning of a "massive transition" from oil-based infrastructure. Gerber is optimistic about Tesla's Cybertruck, the first pickup truck that will be produced. Production is expected to start by the end of 2023. Bido said that Tesla cannot be an EV leader without lowering prices. The Cybertruck is coming, which is why you have to be a bull. The truck business is huge not only for Tesla, Rivian, Ford, and many other people who are planning to enter the truck industry," he stated, calling it "massive." Francisco Bido is the senior portfolio manager at F/m Investments' Integrated Alpha Group. He said that now is not the right time to place a bet on Tesla.
"We have a quantitative process in Integrated Alpha. "We have a quantitative process at Integrated Alpha. It's leading me into believing that Tesla isn't really a good investor at this point." Gerber said. Gerber said that "I believe the worst is happening right now for margins and I think margins can get better over time." He also stated that Tesla will see "massive cost savings" once its Gigafactory at Berlin reaches "profitable scaling". Gerber stated that the battery is one of the most critical components of an EV. He also said that Tesla is a world leader in battery technology. To supply its vehicles with batteries, Tesla collaborates with Contemporary Amperex Technology and Panasonic. It also produces batteries through its huge Gigafactories, which is an advantage that rivals such as Ford or GM do not have. But Bido is less optimistic about Tesla's leadership in battery EVs. He stated that Toyota has the most patents on EV batteries and the most. It's not enough to propel them forward. This is not a long-term strategy. This is just a short-term run. It doesn't tell me anything about next year," he stated. Bido pointed out that Tesla must "get beyond this stage of over-promising, under-delivering," and cited the Cybertruck as one area where the company has overpromised. "Promises are not enough.
It is essential that you deliver at some point. Investors should do their research and look at the competition, he said. Gerber said that Tesla is a good buy because it is fairly valued and trades at "far" multiples of its potential growth rate and potential. He said that investors have a unique opportunity to long-term invest in a company that is a leader both in their field and in other segments of technology. They should average the dollar cost of the company as it is a volatile investment. This will ensure that they are well-served over the long term.