Tesla Inc (NASDAQ: TSLA) has long been a divisive company. And that’s polite. Fast-forward two years, and every investor who has an opinion on this company ends up in one of two camps. In one camp, it was argued that Tesla would become a company that would one day surpass Amazon.com Inc (NASDAQ: AMZN) with the real Iron Man – CEO Elon Musk – at the helm. Another passionately believed that Tesla was the biggest scam in the world, Musk was a con, and that the company was aiming for zero.
Well, the current debate is still not much different. Yes, Tesla has proven that it can grow steadily by becoming profitable. But for many people in the second camp, the new challenge is the company’s $ 656 billion market cap (more than Toyota, Volkswagen, General Motors, and Ford combined).
But Tesla’s stock price performance over the past year or so has continued to delight its fans and confuse its critics. Tesla shares are up nearly 500% in the past 12 months. And it has grown by over 1,100% over the past two years.
This was the reason for many investors, and many have done so. But jumping on that bandwagon after 1,100% growth in two years is not for the faint of heart in any investment. And Tesla shares, despite their success, remain highly volatile.
Driving Tesla Home
But now one investment bank is taking risks with Tesla. Morgan Stanley is now telling investors that it is more risky, according to Bloomberg. no own Tesla than own it.
Why? Well, Morgan Stanley believes the Biden administration’s proposed infrastructure spending plan is a game changer. The plan, in its proposed form, reportedly includes $ 174 billion in electric vehicle infrastructure development in the United States. The broker believes this will give Tesla an additional edge over other automakers in the US. His conclusion is that “car investors face greater risk of not owning Tesla stock in their portfolio than owning Tesla stock in their portfolio.” This is despite “a maze of national and local laws that will present advantages and disadvantages to various automakers.”
It’s worth noting that the Biden administration’s infrastructure plan has yet to go through a narrowly divided US Congress. Before the transition, it was possible to make significant amendments to it. However, it’s worth noting that it is a big call to say that owning stocks like Tesla is less risky than not owning them. We’ll have to wait a bit to see if Morgan Stanley is right.
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John McKee, CEO of Whole Foods Market, an Amazon subsidiary, serves on The Motley Fool’s board of directors. Sebastian Bowen owns shares in Ford and Tesla. Motley Fool Australia’s parent company, Motley Fool Holdings Inc., owns shares and recommends Amazon and Tesla and recommends the following options: long calls in January 2022 for $ 1,920 on Amazon and short calls for $ 1,940 in January 2022 for Amazon. Motley Fool Australia has recommended Amazon. Motley Fool has a disclosure policy. This article contains general investment advice only (in accordance with AFSL 400691). Courtesy of Bruce Jackson.