Tesla stock will gain 550% and SpaceX's valuation will triple by 2030 under Elon Musk's leadership, top investor says (2024)

Phil Rosen

·2 min read

Shares of Tesla have tanked this week following a downbeat earnings outlook, but fund manager David Baron remains bullish on Elon Musk's carmaker, as well as his rocket-producer SpaceX.

He forecasts Tesla stock to gain about 550% to hit $1,200 a share by 2030, and for SpaceX to triple in valuation over the same period, according to a recent interview conducted by Bloomberg.

Baron runs the Baron Focused Growth Fund, which counted Tesla and SpaceX as its largest holdings as of December 31, 2023. The fund climbed 28% in 2023, outperforming the S&P 500's gain of 24%.

Baron told Bloomberg that the growth outlook for Musk's companies remains strong, even if it has moderated from previous calls.

"While he may not be growing 50% a year as the company thought, this year in a tough environment he's still growing volume by 15% to 20% per year and making us $7,000 per car of gross profit," Baron said.

His comments come on the heels of a rough week for Tesla, which reported revenue and profit that lagged estimates, and warned of a production slowdown in 2024. The stock tumbled 12% on Thursday following the results and a tumultuous earnings call one analyst called a "train wreck."

"This was the most sobering outlook I have seen from Tesla," Gene Munster, the managing partner at Deepwater, said in an interviewwithCNBCWednesday.

Meanwhile, Baron expects SpaceX's valuation to increase by 20% this year. Longer term, he sees it doubling within three years and tripling by 2030. Bloomberg previously reported the company is worth more than $175 billion.

The Tesla allocation in Baron's fund is critical for his ambition to boost his total assets to $2 billion, up from current levels of about $1.3 billion.

One reason Baron is so bullish on Musk is that the world's richest person still holds a significant stake in his companies. Baron says he looks for such ownership levels when deciding where to invest.

"[Musk's] interests are aligned with ours," Baron maintained. "He's not going to do anything stupid to change the trajectory of the companies."

Read the original article on Business Insider

Tesla stock will gain 550% and SpaceX's valuation will triple by 2030 under Elon Musk's leadership, top investor says (2024)
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