The billionaire Ron Baron believes Tesla will be a $ 2 trillion company after the Silicon Valley automaker’s shares rose more than 400% this year.
Baron, a longtime Tesla supporter and shareholder, said Wednesday morning “Squawk Box” He believes Tesla’s vehicle sales will grow 50% annually for the coming years. Tesla’s current market capitalization is $ 416.2 billion.
“We’re very happy about it,” he said.
Baron’s eponymous investment firm, with assets under management of $ 39.9 billion, holds more than 7.3 million Tesla shares as of September 30. They were purchased at an average cost per share of $ 43.07, according to the company. By investing in Tesla, the company made about ten times its money.
“I’ve been saying for a long time I thought it was going to be $ 1 [trillion] to $ 2 trillion. Given recent developments, I think $ 2 trillion is the right number. I think it’s five times from here, “said Baron.
If Tesla can achieve a $ 1 trillion valuation, it would look like well-known tech companies like Amazon, Microsoft and google parents alphabet. Apples The market capitalization is already at 2.1 trillion US dollars.
Tesla’s shares are up more than 400% this year by Tuesday’s close of trading. The stock will trade on the following August 31 on a split-adjusted basis a five for one stock split.
Tesla stocks have been volatile since Baron invested in the Silicon Valley automaker. He described it as “up and down like a yo-yo”.
Tesla was CEO at Tesla’s 2020 Annual General Meeting last month Elon Musk The company’s vehicle deliveries in 2020 would increase by 30% to 40% year over year. This is in line with the previous forecast of 500,000 cars to be delivered this year.
Musk also predicted the company will be able to produce a self-driving car valued at $ 25,000 within three years.
The annual meeting took place on September 22nd with Tesla’s much-anticipated Battery Day on the street were left disappointed the multi-year schedule for improvements to the company’s batteries and the lack of concrete goals.
Baron Capital also owns approximately 1.3 million shares of Musk’s SpaceX, which it first bought in September 2017. The company last increased this stake in August. Other important investments are Hyatt Hotels, Amazon and Charles Schwab. The company has more than 400 investments in its portfolio.
“This year is an exceptional year for us,” he said. “This is probably the best year we’ve ever had.”
– CNBCs Lora Kolodny and Pippa Stevens contributed to this report.