Investors looking for “a massive buying opportunity” should look to Tesla, Wedbush analyst Dan Ives said in a note Monday.
Tesla shares are down 33% from their all-time high. A rise in interest rates over the past month has caused high-growth tech stocks to shift to cyclical stocks that will benefit from an economic reopening.
Ives said three factors had also hurt Tesla shares in recent weeks: valuation concerns, increased global competition in the electric vehicle space, and a shortage of chips and demand from China “causing softness in it. from 2021. “
But now “is not the time to panic,” Ives said, as the recent weakness in EV stocks will be brief as companies digest their earnings.
“The sell-off we have seen in the land of EVs creates a massive buying opportunity in our opinion for the Chinese EV players themselves, as well as the leader of the Tesla group heading into this golden age of vehicles. electric, “Ives said.
Fundamentals remain strong for the space, as the Biden administration’s tax incentives and green energy agenda should help spur significant demand for electric vehicles in the coming months, according to the note.
Ives expects electric vehicle sales to account for 20% of all car sales globally by 2030, a significant increase from the current 3%.
Ultimately, Ives sees a significant advantage for Tesla; expects the company to reach a market valuation of $ 1 trillion before the end of the year. With a market capitalization of $ 574 billion on Monday, Tesla would have to rise 75% to reach a valuation of $ 1 trillion, assuming its outstanding shares held steady.
“At the EV party, it’s 8pm, not 2am,” Ives said.
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