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Investor Forecasts a Stellar Rise for Tesla and SpaceX by 2030

Despite a recent downturn in Tesla’s stock following a lukewarm earnings outlook, fund manager David Baron remains highly optimistic about Elon Musk’s flagship ventures, Tesla and SpaceX. In a Bloomberg interview, Baron, who manages the Baron-Focused Growth Fund, projects a remarkable 550% increase in Tesla’s stock value by 2030, reaching an impressive $1,200 per share. He also anticipates SpaceX’s valuation to triple during the same period.

Baron’s fund, which prominently features Tesla and SpaceX as its largest holdings, outperformed the S&P 500 in 2023 with a 28% gain compared to the S&P’s 24%. This achievement underscores Baron’s confidence in Musk’s vision and leadership.

Amidst Tesla’s challenging week, with reported revenues and profits falling short of expectations and warnings of a production slowdown in 2024, Baron maintains a positive outlook. He acknowledges a moderated growth pace but highlights Tesla’s substantial volume growth of 15%-20% per year and a robust $7,000 gross profit per car.

The fund’s Tesla allocation is a cornerstone of Baron’s strategy to expand his assets from the current $1.3 billion to $2 billion. His bullish stance on Musk is driven by the entrepreneur’s significant personal investment in his companies, which Baron sees as a key indicator of aligned interests and responsible stewardship.

For SpaceX, Baron forecasts a 20% increase in valuation this year, with expectations of doubling in three years and tripling by 2030. This optimism is grounded in the company’s current valuation, reported by Bloomberg to be over $175 billion.

Baron’s perspective offers a long-term, bullish view of Musk’s ventures, appealing to investors who share a similar outlook on growth potential and leadership alignment. His analysis provides a lens through which to view the future trajectories of Tesla and SpaceX, both pivotal players in their respective industries. As the market navigates through immediate challenges, Baron’s predictions serve as a reminder of the potential long-term gains in visionary and well-led companies.