- The more than 30% decline in shares of Tesla over the past month represents “a massive buying opportunity,” according to Wedbush analyst Dan Ives.
- In a note on Monday, Ives said the the recent pullback in EV stocks is short-term in nature as companies digest their recent gains before the next leg higher.
- “We believe Tesla will hit a trillion dollar market cap in 2021 given the bullish EV secular thesis set to play out over the coming years,” Ives said.
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Investors looking for “a massive buying opportunity” should look at Tesla, Wedbush analyst Dan Ives said in a note on Monday.
Shares of Tesla are off 33% from its all-time high, as a surge in interest rates over the past month has sparked a rotation out of high-growth tech stocks and into cyclical stocks poised to benefit from a reopening of the economy.
Ives said three factors have also hurt Tesla shares in recent weeks, including valuation concerns, increased global competition in the electric vehicle space, and a shortage in chips and China demand “causing softness out of the gates so far in 2021,” according to the note.
But now “is not the time to panic,” as the recent weakness in EV stocks is short-term in nature as companies digest their gains before the next leg higher.
“The sell-off we have seen in EV land creates a massive buying opportunity in our opinion to own Chinese EV players as well as the leader of the pack Tesla heading into this golden age of EVs,” Ives explained.
The fundamentals remain strong for the space, as tax incentives and a green energy agenda from President Joe Biden’s administration should help spur significant demand for EVs over the coming months, the note said.
Ives expects EV sales to represent 20% of all auto sales globally by 2030, a significant increase from the current 3% penetration today.
Ultimately, Ives sees significant upside for Tesla, given that he expects the company to hit a $1 trillion market valuation before year-end. With a current market capitalization of $574 billion, Tesla would have to surge 75% to hit a $1 trillion valuation, assuming the company’s outstanding shares remained constant.
“In the EV party, its 8pm, not 2am,” Ives said.