Elon Musk has been head of the car manufacturer Tesla for almost 20 years. Mario Tama/Getty Images
Fund manager David Baron explained his extremely bullish views on Elon Musk-led Tesla and SpaceX.
He told Bloomberg that Tesla could rise 550 percent by 2030 and SpaceX could triple its valuation.
Both companies were the largest holdings in Baron’s fund as of December 31, 2023.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by an editor.
Tesla shares have slumped this week after a poor earnings outlook. Nevertheless, fund manager David Baron remains optimistic for Elon Musk’s car company and his rocket manufacturer SpaceX.
He predicts that Tesla shares will rise by 550 percent to $1,200 per share by 2030. In the same period, he believes SpaceX’s valuation will triple, as he stated in a recent “Bloomberg“conducted interview said.
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Baron runs the Baron Focused Growth Fund, which counted Tesla and SpaceX among his largest holdings as of December 31, 2023. The fund rose 28 percent in 2023, outpacing the S&P 500’s 24 percent rise.
Speaking to Bloomberg, Baron said the growth outlook for Musk’s company remains strong, although it has weakened from previous forecasts. “It is not growing by 50 percent per year, as the company thought. “But this year, in a difficult environment, the volume is still growing by 15 to 20 percent a year and brings us a gross profit of 7,000 US dollars (about 6,450 euros) per car,” says Baron.
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A tough week for Tesla
His comments follow a tough week for Tesla. The company had reported revenue and profit that fell short of estimates and warned of a production decline in 2024. The stock plunged 12 percent on Thursday following results and a tumultuous earnings release that one analyst called a “train wreck.”
“This was the most sobering outlook I’ve ever seen from Tesla,” Gene Munster told CNBC on Wednesday. He is a managing partner at Deepwater.
Still, Baron expects SpaceX’s valuation to rise 20 percent this year. In the longer term, he sees a doubling within three years and a tripling by 2030. “Bloomberg” previously reported that the company is worth more than $175 billion.
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The Tesla allocation in Baron’s fund is crucial to his goal of increasing his total assets from the current approximately $1.3 billion (approximately €1.2 billion) to $2 billion (approximately €1.85 billion).
One reason Baron is so bullish on Musk is because the world‘s richest person still holds a significant stake in his companies. Baron says he looks at such holdings when deciding where to invest.
“Musk’s interests align with ours,” Baron said. “He won’t do anything stupid to change the course of companies.”
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