Why Tesla is undervalued

Why Tesla is undervalued

By Tanvir Zafar | Tanvir | 11 Oct 2020

Tesla is one of the hottest companies in the world right now. The firm is breaking grounds in several aspects, and it has continued to lead the world in the race for electric vehicles.

Earlier this year, the Silicon Valley company saw a significant surge in its stock that sent analysts’ heads spinning. Tesla entered the year trading at about $450 per share, but by February, the stock had surged twice and was inching closer to the $1,000 threshold.

To be fair, the hype has slowed down and Tesla has come back to Earth – figuratively. Even at that, however, the firm’s stock is still trading at $779. While no one knows why the firm is experiencing such a surge, one thing is clear; Tesla isn’t going anywhere.

Several analysts also predict that Tesla will see significant surges in the future. Why?

The hype around Big Tech

The most significant reason why Tesla is undervalued is because the firm is enjoying from something that just about every firm in its space is benefiting from – the common moniker.

Whether by virtue of its product or its location, tesla is, in fact, a Big Tech company. Amid the coronavirus pandemic, Big Tech firms have seen significant surges in their stock prices. Amazon, Apple, Facebook, Netflix, and Zoom are just a few that have especially stood out. However, Tesla is also benefiting from that.

Investors have rushed to purchase tech stock in this time, and Tesla has seen benefits in terms of that as well. With many beginning to make change to their investment patterns, tech stocks have been the big winners. That good fortune has rubbed off on Tesla.

Tesla does have good products

Another important factor that needs to be highlighted is the fact that the company has a significant number of excellent products on the market right now. The company’s flagship Model 3 and Model S vehicles have ramped up sales and production, and they have continued to blaze the trail as far as electric vehicles are concerned.

While Tesla is seeing some stern competition from several companies looking to enter its space, it remains the industry leader by a significant degree.

The firm also has an ace in the hole- the Cybertruck. As of last year, orders for Tesla’s upcoming truck surpassed the 250,000 mark, according to Elon Musk. The vehicles have been praised for their innovative means of disrupting the truck space, and with users getting ready for their arrival, investors will be keeping a close eye on the firm.

The firm is still doing well in China

Tesla has also enjoyed a significant amount of fanfare in China. The firm already has a $2 billion gigafactory in the country, and it enjoys access to the largest market for electric vehicles in the world. 

The coronavirus might have significantly hampered sales and production, but when China reopens and global economic activity resumes, Tesla will surge – and so will its stock.

Tesla might be undervalued now, but the future definitely is bright.

Tanvir Zafar
Tanvir Zafar

Crypto writer and journalist


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