Tesla Still Attractive & Out of Competitor Reach Despite Musk's Twitter Distraction, Says Loup Funds' Munster

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Tesla continues to be attractive despite short-term headwinds due to Elon Musk's temporary Twitter distraction, according to Loup Funds' Gene Munster. He is sure that competitors will not be able to close the gap with Tesla in the next few years, because building an electric car is really difficult.

Big tech companies are out of favor in current market conditions, but Loup Funds' Gene Munster said it is only a matter of time before investors regain their appetite for growth. In an interview with Benzinga, he shared his view of the market. Munster said he was prepared for a drop in tech stocks in the short term, but he believes the money will bounce back into the group as investors eventually seek growth opportunities in big tech companies following multiple compression.

“Investors are human and humans like things that are growing,” Munster said Tuesday on Benzinga's “PreMarket Prep.”

The analyst expects a return to mega-cap tech in 2023, but he noted that he does not foresee all companies benefiting equally. Among those in whom he is confident, Munster named Apple and Tesla. “There are a couple companies - Apple and Tesla - that kind of stand out among the six or seven biggest tech companies,” he said.

Tesla is now facing some short-term headwinds as its CEO, Elon Musk, spends some of his time focusing on Twitter, which he recently acquired. Munster noted that although this factor negatively affected Tesla's multiple, it actually did not change anything in the company's business.

“I think it's getting, near term, more attractive. I've been a long-term believer in this. None of that long-term optimism has changed,” Munster said.

The analyst also said that he continues to be confident in Tesla's leadership over competitors. He said it was a stretch to think legacy automakers can close the gap “in the next few years.”

“I just still believe that it's a lot harder to build an electric car than it would seem,” Munster said.

© 2022, Eva Fox | Tesmanian. All rights reserved.

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