5 Interesting reasons to buy Tesla Stock
- When Tesla went public in 2010, it was the first U.S. car company to IPO on the stock market since Ford offered stock to investors in 1956. Fast forward to today, when Tesla was added to the S&P 500, it came in as the sixth largest stock in the index. No stock has ever come in with that high of a weight.
- It already carries a higher weight than Warren Buffett’s Berkshire Hathaway, which has a total return of 2,744,062% since its founding in 1965. Berkshire has almost ten times the revenue Tesla has.
- Tesla is much larger weight than Walmart, which employs more than 2.2 million people globally.
- Sweden, as a country, produced $530B in GDP for 2019. Tesla’s market cap of $1trillion is almost the entire output of the Scandinavian nation.
- Over the past 10 years, Tesla’s stock is up over 17,977% and it got to the index after an incredible run.
Where will Tesla stock be in 10 Years? Is Tesla stock a long-term buy?
In the third quarter, Tesla's revenue grew 57% year over year. Tesla management said the company expects to grow its EV deliveries at an average annual rate of 50% over a multi-year horizon. In 2020, the company delivered nearly 500,000 vehicles. Based on its expected growth rate, the company could be delivering 28 million cars annually 10 years from now.
To be fair, extending management's "multi-year" estimate to this story's 10 years estimate is extrapolating beyond what the company has said. So let's assume that its growth slows down to an average of 20% annually after five years. By doing so, Tesla could still be selling roughly 9.5 million EVs annually by 2030.
For perspective, that's a number close to what each of Volkswagen or Toyota Motor sold in 2020. To sell that many EVs, Tesla needs to first produce them. The company currently has a production capacity of roughly 1 million cars per year. It is constructing two new Gigafactories, one in Berlin and the other in Texas.
Beyond that, the company plans to launch new models including its Cybertruck, Semi, and Roadster. Tesla plans to construct at least two new Gigafactories beyond what's already announced in the coming years, though their locations are not yet decided. So, it is a good idea to buy Tesla stock now considering the growth potential it has in the years ahead.
When and how often should you buy Tesla stock?
Warren Buffett believes trying to time the market is a waste of time and hazardous to investment success.
He also says it is a "mistake" to not invest in a great company due to market worries, and it is better to keep buying a good company's stock regularly instead of waiting for the price to drop.
This of course includes Tesla stock, as it is the fifth largest company in the S&P500 by market size.
Tesla Stock Price & Trends Chart
[finviz ticker=TSLA width=500]
3 important points to remember before investing in Tesla
- Please note, the very nature of Tesla's business makes the stock very volatile, so be prepared for high volatility in the stock price for this company.
- Safeguard your portfolio against massive up or down movements by buying at least 15-20 stocks in it. Buying only one or a couple of stocks in your portfolio is a surefire recipe for disaster.
- Have faith in the good practices of investing and hold your investment for at least 3-5 years.
How to Buy Tesla stock in UAE
Follow the steps mentioned below to buy Tesla stock safely from the comfort of your home.
Step 1 - Choose the right investment platform
There are different types of investment platforms made for different purposes. Investment platforms made for. long-term investing are different to those made for day-trading and margin trading.
Long-term investment platforms are suitable for majority of the population because they are much safer and the fee structure is clearer as well.
Day-trading platforms as the name suggests is for day-traders who are do intraday stock trading often buying and selling stocks many times on the same day. This approach is of course risky and only for the most experienced and advanced traders, not for the general public.
Wealthbullet.com - Best investment platform for NRIs
The Wealthbullet investment platform (powered by Stockal) is meant for long-term investors who want to buy and hold their investments for at least 3-5 years or more. It is not meant for day-trading..
- Investment tips from renown investment analysts provided free of charge to Wealthbullet clients through the popular Wealthbullet Investment Community.
- SEC regulated New-work based investment platform with offices in New York, Dubai, and Bangalore, India.
- $500K US federal insurance on each account for bankruptcy protection. For details, please see www.sipc.org.
- Ability to buy any stock or ETF listed on the New-York Stock Exchange (NYSE) or the Nasdaq.
- Dollar based investing or Fractional investing is possible where investors can buy invest in any stock or ETF regardless of high unit price and hold fractions of a unit.
- Investment platform approved and offered by HDFC Bank in India, HDFC Bank also being one of the stakeholders in the investment platform.
- International stock markets apart from NYSE and Nasdaq are not yet available in the platform, although they will be added soon.
- Investments in currencies other than USD are not yet possible because only US stock markets are available to invest in.
eToro.com - Best day-trading platform
- Trade in Stocks and ETFs,
- Trade different types of Cryptocurrencies
- Apply leverage in your portfolio using CFDs
- Copy other traders' trades.
- User-friendly interface and mobile apps for ease of trading.
- Comprehensive analytics and charts for traders.
- This platform is more suited for advanced traders, not for the general public.
Step 2 - Open an account
The next steps are to open an account in either one of the platforms mentioned above:
Step 3 - Buy Tesla Stock
The final step is to actually buy Tesla stock on the platform after the account opening procedures are completed.