Tesla stock will gain 550% and SpaceX's valuation will triple by 2030 under Elon Musk's leadership, top investor says


Elon Musk

Elon Musk.Mario Tama/Getty Images

  • Fund manager David Baron broke down his highly bullish views on Elon Musk-led Tesla and SpaceX.

  • He told Bloomberg Tesla can soar 550% and SpaceX can triple in valuation by 2030.

  • Both companies were the largest holdings in Baron’s fund as of December 31, 2023.

Shares of Tesla have tanked this week following a downbeat earnings outlook, but fund manager David Baron remains bullish on Elon Musk’s carmaker, as well as his rocket-producer SpaceX.

He forecasts Tesla stock to gain about 550% to hit $1,200 a share by 2030, and for SpaceX to triple in valuation over the same period, according to a recent interview conducted by Bloomberg.

Baron runs the Baron Focused Growth Fund, which counted Tesla and SpaceX as its largest holdings as of December 31, 2023. The fund climbed 28% in 2023, outperforming the S&P 500’s gain of 24%.

Baron told Bloomberg that the growth outlook for Musk’s companies remains strong, even if it has moderated from previous calls.

While he may not be growing 50% a year as the company thought, this year in a tough environment he’s still growing volume by 15% to 20% per year and making us $7,000 per car of gross profit,” Baron said.

His comments come on the heels of a rough week for Tesla, which reported revenue and profit that lagged estimates, and warned of a production slowdown in 2024. The stock tumbled 12% on Thursday following the results and a tumultuous earnings call one analyst called a “train wreck.”

“This was the most sobering outlook I have seen from Tesla,” Gene Munster, the managing partner at Deepwater, said in an interview with CNBC Wednesday.

Meanwhile, Baron expects SpaceX’s valuation to increase by 20% this year. Longer term, he sees it doubling within three years and tripling by 2030. Bloomberg previously reported the company is worth more than $175 billion.

The Tesla allocation in Baron’s fund is critical for his ambition to boost his total assets to $2 billion, up from current levels of about $1.3 billion.

One reason Baron is so bullish on Musk is that the world’s richest person still holds a significant stake in his companies. Baron says he looks for such ownership levels when deciding where to invest.

“[Musk’s] interests are aligned with ours,” Baron maintained. “He’s not going to do anything stupid to change the trajectory of the companies.”

Read the original article on Business Insider



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