UBS analyst also highlighted that “Tesla has the potential to become one of the most valuable software companies.”
The performance of leading electric car maker Tesla Inc (NASDAQ: TSLA) in the stock market has convinced a long-time skeptic into a fervent believer of the potential it holds. The hitherto skeptic, UBS analyst Patrick Hummel, was forced to change tunes as he more than doubled his Tesla stock price target from $325 to $730 while adding that the “the narrative is no longer about the company’s leadership in electric vehicles, it’s about “winning” in software.”
Though Hummel kept his rating at neutral, he believes that the competition in the electric car market would have little to no effect on the performance of Tesla which he believes would be the most profitable business in the field for years to come. The analyst pointed out that its profitability would be majorly swayed by its software offerings. Presently, in the electric car industry, Tesla is the only automobile maker that provides meaningful software updates to its vehicles.
Not only that, its autopilot driver-assistance system is undoubtedly one of the best in the industry. This driver system has the advantage of being able to be improved through over-the-air updates too.
The Hummel’s lead team also highlighted the fact that “Tesla has the potential to become one of the most valuable software companies.” He also added that the electric car maker could become one of the largest and most profitable original equipment manufacturers globally by 2030, and projecting this segment of its business could be worth around an estimated $200 billion by then. Invariably this means that “the scalability of Tesla’s technology creates the biggest software-driven revenue opportunity in the industry,” Hummels concluded.
Interestingly, Hummels has had Tesla stock on Neutral since 2020 after he had it at “sell” and “not rated” since around 2017. The change of heart is an indication that Tesla stock has performed exceeding well in the last one year. During this period, the stocks of the Elon Musk-led company have enjoyed a 360% though its performance last month was its worst performance since March 2020. Since the high of January 26, where it closed around $883.09, the stock has lost over 20% of its value and as of yesterday, it was trading around $653.20 (-4.84%).
Today in the pre-market, TSLA stock is 0.34%, reaching the level of $655.44.
If you want to get other latest updates from the stock markets, please, follow this link and enjoy reading the news on Coinspeaker!
Oluwapelumi is a believer in the transformative power Bitcoin and Blockchain industry holds. He is interested in sharing knowledge and ideas. When he is not writing, he is looking to meet new people and trying out new things.
