on the crypto
Shares of Tesla, Amazon and Nvidia may not be too expensive, according to a new analysis. ValuAnalysis, a London-based equity investment and economic fund management firm, argues that investors tend to price high-growth companies underestimating them, and these tech stocks have incredible growth potential. The ValuAnalysis fund holds shares in both Nvidia and Amazon, which make up a combined 4% of its portfolio. The fund does not currently hold Tesla.
Tesla and the next vehicle revolution
If it's true that battery electric vehicles will eventually take over from internal combustion vehicles, then the price of Tesla's TSLA stock may begin to make sense. The report from the company ValuAnalysis suggests that, based on a conservative projection of its electric vehicle sales over five years, Tesla is currently trading at an overall reasonable price considering the cash flow the company could expect by 2025. "Not there is nothing extraordinary about the hidden assumptions in the Tesla share price, ”said Pascal Costantini, the author of the ValuAnalysis report. "They might still be wrong, but they're not crazy."
Amazon's global platform
Amazon is the largest and most established of the companies that ValuAnalysis has profiled. The report said the company is set to grow further due to the "platform effect" created by its global popularity. Any marginal advantage that Amazon (Amazon shares) can offer consumers is amplified by its instant global reach. ValuAnalysis researchers believe that Amazon is not too expensive because it reliably generates large amounts of cash flow and its CEO, Jeff Bezos, is obsessed with innovation.
Nvidia's dominance in the technology of the future
According to ValuAnalysis, Nvidia (NVDA) holds a dominant position in sectors of the chip industry that could see rapid adoption thanks to the technology of the future, such as artificial intelligence and autonomous vehicles. Costantini said that if Nvidia's acquisition of Arm is successful, it will give the company a huge boost. "They clearly have such a huge advantage now that it's hard to imagine how anyone could reach them," Costanini said. "If I were Intel (INTC), I would be really worried."
Is the hypothesis of a bubble still open?
Yes. Other analysts argue that the conditions created by the coronavirus pandemic and financial aid have sent stocks into a frenzy this year and that there is a bubble that consists largely of tech companies. Some people connect what is happening today with the dot-com bubble of 20 years ago. But Costantini argues that the recent rise in tech stocks is notably different. And he's betting his reputation on it.
