Billionaire Wall Street analyst Chamath Palihapitiya has claimed that Tesla might soon be worth over a trillion dollars, making it one of just six companies ever to read the incredible benchmark, according to CNBC. The claim comes as shares in the company, founded by Elon Musk, have reached new heights, trouncing previous expectations from the stock market.
Palihapitiya — who worked at Facebook before starting his own venture capital fund — believes that the key to Tesla’s success has been its focus on renewable energy.
“It is the leading hedge when it comes to electrification and decarbonization. This is no longer about cars, that’s the first wave of growth,” the billionaire explained. “I think people are pricing in the evisceration of traditional autos and an enormous shift to [electric vehicles], of which Tesla will get the disproportionate share.”
“This is worth trillions of dollars,” he concluded.
There are currently only five other trillion-dollar companies in the world: Apple, Amazon, Microsoft, Saudi Aramco, and Google’s parent company Alphabet.
Stocks prices of Tesla, which trade as TSLA, have jumped from a value of $260 one year ago to $1,500 today, making the company the United States’ highest valued automaker.
Musk himself has allegedly continued to push the renewable energy aspects of the company, and the second-quarter earnings report stated that the energy storage business Megapack has begun earning a profit, a major new milestone for Tesla.
Tesla has also been riding on a wave of good press after it was announced that it would be building the largest auto-manufacturing facility in the country near Austin, Texas. As was reported by The Associated Press, the move involves an investment of $1.1 billion into the area, in addition to employing around 5,000 people to construct futuristic new vehicles such as the Cybertruck pickup and the Model Y SUV.
However, while Palihapitiya believes that the financial future for Tesla remains bright, other analysts are not so sure. For example, Bank of America has urged caution for those looking into buying Tesla stock, warning that the current price is “hyperbolic,” per Business Insider.
“In our view, the $1,500+ stock price is not supported by fundamentals, with valuation driven largely by momentum and low rates,” wrote BoA analyst John Murphy, adding that profits “are not consistent, and sustainability remains a question.”
Though Tesla has been the subject of media focus over the past few days, Elon Musk dominated headlines earlier this month for an entirely different reason. As was previously reported by The Inquisitr, the SpaceX founder was in the news after his initial endorsement of rapper Kanye West’s presidential run.