Tesla’s (TSLA) valuation has long been a point of contention on Wall Street, but one veteran strategist says the market may once again be underestimating how much the company can grow.
In a new interview on Fox Business, Fitzgerald Group principal Keith Fitz-Gerald believes that Tesla can realistically grow into its current valuation.
The Wall Street strategist points to history as context, noting that skepticism around Tesla’s multiples is nothing new.
“They’ve done it before. Tesla’s PE ratio was pooh-poohed largely pre-2020. It’s grown immeasurably since then.”
According to Fitz-Gerald, today’s market is once again underestimating the firm, saying investors are still viewing Tesla through too narrow a lens. He says Tesla is sitting at the intersection of multiple large technological shifts that the market has not fully priced in.
“I think that you’re looking at a whole series of things that people don’t yet recognize working together. AI, robotics, energy, data transmission, energy storage, all of these things are being put together in a way that the street does not yet understand.”
He says the convergence of those areas changes how Tesla should be evaluated, not as a single-product automaker but as a platform spanning several major industries at once.
“I think that stock also doubles within the next five years and then some.”
According to Fitz-Gerald, the disconnect between how Tesla is currently valued and how its combined technologies may scale over time is what creates the opportunity, especially for investors willing to look beyond near-term metrics and focus on the broader convergence he believes is still being overlooked.
Last month, Elon Musk said that Tesla will ultimately ship more AI chips than Nvidia, AMD and everyone else combined.
“We expect to build chips at higher volumes ultimately than all other AI chips combined. Read that sentence again, as I’m not kidding.”
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