Ron Baron is a legendary investor whose fund has some of the best returns on the market, and he’s buying lots of Tesla stock.
Tesla’s shares have been heading upward in recent weeks, and one analyst thinks the stock still has a lot of room for growth. On the heels of increased demand from Tesla’s recent price cuts, some are looking toward the stock’s upside for future years, especially as more consumers consider buying electric.
Above: Ron Baron on CNBC’s Squawk Box (Image: CNBC).
Head of Baron Capital Ron Baron said that he thinks Tesla’s stock could hit $1,500 by 2030, as stated during a recent episode of CNBC’s Squawk Box. During the session, Baron said he wasn’t concerned about volatility in the market, especially with current levels of consumer demand for Tesla’s vehicles.
Baron considers Tesla’s current demand to be at historically high levels, and the 79-year-old veteran investor expects the company’s stock price to keep going up in the years to come. Tesla makes up about 30 percent of the BPTIX portfolio, making it Baron’s largest holding.
“Demand picks up so much, it’s unprecedented demand for his cars right now,” Baron said to CNBC during the recent segment of Squawk Box. “We started investing in his company in 2014, and they were doing 31,000 cars a year … he thinks 20 million cars by 2030. I’m thinking $1,500 a share by 2030.”
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Baron’s mutual fund has remained one of the greatest benefactors of Tesla’s exponential growth in the past several years. With a total of $5.7 billion in managed assets, The Baron Partners Fund (BPTIX) has seen a five-year return of about 26.5 percent on Tesla’s stock on an annualized basis, and a 10-year return of 20.9 percent. According to Morningstar, these figures make the fund the best-performing U.S. equity fund over the long-term period.
“I’m not really worried about the stock market,” Baron added. “I don’t worry about the market. I don’t worry about the economy.”
As for his confidence in Tesla, Baron noted that Tesla has been called “the safest car ever built in the world,” and he expects the automaker to put out a lower-cost model which he says will make the company worth seven to 10 times more down the road.
Above: Billionaire investor Ron Baron explains why he is bullish on Tesla (Video: YouTube / CNBC).
To be sure, Baron is bullish on Elon Musk’s companies in general. Last year, Baron disclosed that one of his largest purchases of the year included roughly $100 million in private investments with SpaceX, and around $200 million going toward a specific satellite.
There’s no way to know what will happen to Tesla’s share prices in the weeks and years to come, but it’s hard to deny that Baron has had some things right in the past. As for whether Tesla’s stock trading price could hit $1,500 by 2030, the jury’s still out, but an affordable, mass-market EV may be a crucial element of that journey in the years to come.