'We believe the appeal of Tesla shares to growth investors may fade,' Barclays said.
CEO Elon Musk tapped Wall Street to raise $2.7 billion in stock and bond offerings, which sparked a relief rally in its stock.
"Case for a trillion-dollar market cap used to center around high-volume, high-profit auto sales... now it's all in on autonomy," says Barclays' autos analyst Brian Johnson. "We believe the appeal of Tesla shares to growth investors may fade." right off the bat, confidently saying autonomous driving will transform Tesla into a company with a $500 billion market cap.
The pivot to autonomy means now growth investors will have to wait around even longer for any payoff, Johnson notes. The so-called "rational bulls," typically at large institutional investors with a growth mandate, believed that "Tesla will be a multi-product automaker in the next five to seven years with its light vehicle lineup," Johnson said., saying Tesla would be able to offer robo-taxis next year and it will be making cars with no steering wheels or pedals in two years.
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