3 Reasons Tesla Stock Is Poised for Future Growth

In the past decade, Tesla has become synonymous with exceptional returns for investors, soaring by an impressive 2,900%. This growth has not only enriched long-term shareholders but has also significantly increased the wealth of its largest shareholder and CEO, Elon Musk. Despite such extraordinary past performance, the future of Tesla seems equally promising, with newer business avenues poised to drive further growth.

Expanding Beyond Vehicles with Lithium Refining

Tesla's venture into vertical integration has the potential to create new sources of revenue, much like Amazon did with its Amazon Web Services. With the establishment of a lithium refining facility in Texas, Tesla is set to locally produce a crucial component for EV batteries, reducing costs and potentially selling surplus to other manufacturers. Elon Musk has equated the profit margins in this venture to those in the software industry, underscoring the lucrative aspect of this business move.

The Potential of Artificial Intelligence

Another frontier Tesla is aggressively exploring is artificial intelligence through its Full Self-Driving software. With this innovative approach, Tesla aims to revolutionize the driving experience, while also leveraging its own supercomputer, Dojo, to process immense amounts of data. This strategy has dual benefits: bolstering Tesla's self-driving capabilities and creating an additional revenue stream from AI-related services. Some analysts, such as those from Morgan Stanley, predict a significant boost to Tesla's market cap thanks to these AI initiatives.

Core EV Business Still the Foundation

Investments in lithium refining and AI are exciting, but their greatest contributions may ultimately bolster Tesla's primary business—electric vehicles. By potentially lowering production costs and strengthening Tesla's competitive position, these additional ventures are enhancing the underlying value proposition of Tesla's EV lineup. This integration serves to maintain Tesla's appeal to long-term investors, keeping its stock an attractive option in the market.

Tesla, Stock, Growth