Tesla is one of the worst performers in the S&P 500 this year. We've had a number of clients email us, saying that they are tired of all the negative news articles about Elon Musk. The sentiment tide seems to have turned positive lately, and the stock is up 8% over the last week.
The recent vote to approve Musk's pay package spurred the shift. The lead-up to the AGM galvanised investor support for his long-term vision for Tesla. Strong shareholder support ensures that Musk will stay at the helm for the foreseeable future, which is a good thing for the company. It would be nice if he spent less time on Twitter, though.
Another boost to Tesla came from fund manager Cathy Wood of Ark Invest. Wood shot to fame when she called Tesla's initial rise, and now has a bit of a cult following. Ark Invest recently released a research note, with a share price forecast for Tesla of between $2 000 and $3 100 a share by 2029.
Tesla currently trades at about $190 a share, so the forecast is for at least a 10x return over the next five years. Wow! In their low-end forecast, Tesla would have a market cap of $7 trillion, making Musk the world's first trillionaire. Central to Ark Invest's model is the potential for Tesla to launch fully-autonomous robotaxis.
Remember that this is only a forecast, and note too that Ark Invest sold out of their Nvidia shares just before the mega-rally of the last 18 months. Tesla is a very volatile holding, but one to consider for those with a high risk tolerance.