Rashid Umar Abbasi / Reuters
Tesla CEO Elon Musk.
- The arguments used by Tesla short-sellers are running out of steam, said Gene Munster, a managing partner at the venture-capital firm Loup Ventures.
- Tesla has an edge over other automakers in battery technology, charging infrastructure, and autonomous-driving technology, Munster said, and has the potential to become one of the most successful transportation companies.
- Munster's comments came after Tesla beat Wall Street's expectations and made a profit for the second quarter in an row.
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The arguments used by investors betting that Tesla's stock price will fall are running out of steam, Gene Munster, a managing partner at the venture-capital firm Loup Ventures, said on Wednesday.
Munster said there are four subjects that skeptics tend to focus on: the demand for electric vehicles, Tesla's ability to manufacture them, the amount of cash Tesla has, and the way the electric-car maker is valued. The first three are turning in favor of Tesla optimists, Munster said, and the fourth is not a strong foundation for an argument against a company's future prospects.
Tesla's performance during the final nine months of 2019 illustrate the potential the electric-car maker has to become one of the most successful transportation companies, Munster said, though Tesla still faces execution challenges.
"Given the progress over the past year along with the size of the opportunity, all indications point to Tesla's stock taking a similar path to Amazon's over the past decade, with valuation continuing to move higher," Munster said in a blog post published on Thursday.
Tesla has developed an advantage over other automakers in battery technology, charging infrastructure, and autonomous-driving technology, Munster said.
"The opportunity in mobility is massive, and Tesla is the most obvious company to capture a large piece of the prize," he said.
Munster also noted that Tesla CEO Elon Musk has adopted a new, "almost quiet assassin-like," disposition. Musk has in the past publicly sparred with critics.
Munster's comments came after Tesla reported a second consecutive quarterly profit that exceeded Wall Street's expectations.
Since Tesla released its third-quarter results in October, its stock price has more than doubled, from $255 to $646 when markets opened on Thursday. In addition to the third and fourth-quarter profits, Tesla shares have been buoyed by record sales in 2019 and the rapid construction of its factory in Shanghai, which began delivering vehicles to customers at the end of last year.
While Tesla has not yet made a profit over a 12-month period in its 17-year history, it has been profitable in four of the past six quarters.
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