Tesla Stock Faces Its Most Serious Potential Threat: Analyst

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Talk about Tesla (TSLA) rivals usually center around Chinese EV startups and traditional U.S. automakers. But recently, tech giant Apple’s (AAPL) rumored plans to enter the market are causing a stir on Wall Street. Tesla stock rose.



A Reuters report on Monday suggested Apple could introduce a car as soon as 2024. Apple has not commented on the report.

But if true, it would be “one of the biggest moments in the autos and shared mobility industry in 2020 … with the potential to be a transformative event for the industry over the decades to come,” Morgan Stanley analyst Adam Jonas wrote in a note late Tuesday.

“Apple’s potential entry into autos represents perhaps the most credible/formidable bear case for Tesla’s stock that investors have had to consider for some time,” he added.

Tesla has not officially commented on the Reuters Apple car report either. But CEO Elon Musk revealed late Tuesday he once brought up a merger with Apple CEO Tim Cook.

“During the darkest days of the Model 3 program, I reached out to Tim Cook to discuss the possibility of Apple acquiring Tesla (for 1/10 of our current value). He refused to take the meeting,” Musk tweeted.

Meanwhile, Jonas says Apple’s possible entry could hurt traditional automakers like General Motors (GM) and Ford (F).

“Based on our early discussions with investors, most believe that what is already a tall order in: outspending, ‘out-innovating’ and ‘out talent-attracting’ Tesla and the rest of the startups, only gets more difficult for the legacy OEMs if Apple were to really throw its weight around and intensify competition,” he wrote.

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Tesla Stock Rebounds

Shares rose 1.5% to 650 on the stock market today. Tesla stock is about 7% off its all-time high of 695, as some investors cashed in on the rise prior to its Dec. 21 entry to the S&P 500 index.

Apple stock was down 0.4% to 131.40. The stock is nearing a 138.08 buy point from a cup-without-handle base, according to MarketSmith chart analysis. Both Tesla and Apple are Leaderboard stocks.

Among other automakers, GM stock rose 2.5%, Ford is up 1.3%.

Earlier this week, developers of lidar technology surged on the Reuters report, which said Apple wants to build a self-driving car with the laser-based sensors.

Velodyne (VLDR) and Luminar (LAZR) both rallied on Tuesday. But Velodyne gave up some of those gains on Wednesday, falling 3.8%. Luminar dropped nearly 6%.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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