Tesla’s $30 Trillion Market Cap: Is It Really Possible?

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During their latest episode of the VALUE: After Hours Podcast, Taylor, Carlisle, and Brewster discussed Tesla’s $30 Trillion Market Cap: Is It Really Possible?. Here’s an excerpt from the episode:

Jake: Let me ask you guys a philosophical question. I’ve heard the thesis pitched before for Tesla as, why it’s a $30 trillion future market cap company? Because the biggest market cap at any given era has grown at this somewhat geometric looking rate, it’s like 10X whatever it was before. And so, if you go work backwards– That line does hold up to be true. Is there a natural limit to that? Is there an upper bound where you would say like, “Well, no, you can’t go from $3 trillion to $30 trillion on the next round, or do you think there is some truth to that”?

Tobias: I think it’s highly likely that the next one is in that scale. I don’t know how long it takes to get to 30, but certainly. In my lifetime, there’ll be a 30.

Jake: By 2030.

Tobias: Too soon, I would say.

Bill: Yeah, that’s soon.

Tobias: I don’t think it’ll be Tesla. I think it could be Microsoft or Google or something like that.

Jake: At $30 trillion. Wow. OpenAI?

Tobias: Print enough money.

Bill: Yeah.

Jake: Well, that’s fair. That’s part of the equation, for sure.

Tobias: 2030 seems too close.

Jake: But it hasn’t grown at a 3% rate like inflation either.

Tobias: It wasn’t that long ago that $1 trillion was–

Jake: Heard of.

Tobias: When would we go through $1 trillion? What was the first trillion-dollar company?

Jake: Is it Amazon?

Bill: I don’t know.

Jake: Apple?

Tobias: Microsoft.

Bill: My first thought was Microsoft. My second thought was Apple. And I thought self, the second thought is probably right.

Tobias: So, there’s a few now, and Microsoft’s at three.

Bill: Yeah.

Tobias: 10 I guess is the next mark.

Bill: Yeah.

Tobias: 10 to 30, like that could happen–

Jake: But at some point, you have to have the income to justify that valuation. We’re starting to talk about huge percentage of GDP to make that happen.

Bill: That’s the thing. So, with Tesla, you’ve got to truly believe in the royalty per mile driven as an efficient use of capital, I think one. And two, it’s got to be capitalized in a made way. Then you’ve also, I think, got to believe in power generation. I think you probably also have to believe in the idea that these robots are going to hop off of autonomous trucks and fix the trucks, and so they own the delivery. And then I think you also probably have to believe like one or two more other things. I have a hard time believing any of those. Like, we’ll see this. Cybertruck looks as goofy as the Aztec to me.

Jake: [laughs]

Bill: Maybe I’m wrong. I heard Musk say, it’s the most utilitarian car that he could possibly think of. I guess we’ll see. I like the Model S. I think what he’s doing with the Model 3 is really interesting. I think he’s trying to drive down the cost to the point that it is truly a commodity for people to own and that they don’t care, whether or not they rent one or it comes to them autonomously or whatever, and they’re just all fungible. I think it’s an interesting vision.

Jake: When has anyone ever wanted to pay $150,000 for utilitarian?

Bill: Well, but that’s a first adopter. I agree with you. But I think his point would be, “I’ve got to get him out and then I’ll drive the cost down.” I understand, people think he’s a fraud. Forgive me for saying anything positive about him.

Tobias: There’s no way he’s a fraud. The cars are real. The launches are real. All of that is real.

Bill: Yeah.

Tobias: He might be promotional, but no entrepreneur. He’s not going to get to where he is if he’s not promotional. You’ve got to sell that vision.

Bill: That’s right.

Tobias: I want to put your guesses in for the next $30 trillion company. When we hit there, we’ll go back and we’ll revisit and we’ll give the Nostradamus, a shoutout. David—[crosstalk]

Bill: It’s a uranium company. Jokes on you all.

Jake: [laughs]

Tobias: Yeah. That’s Right.

Jake: Whoever lands the gold asteroid.

Tobias: Dimitrios Koutsoumpos says, “TSMC or Intel or Samsung.” Says good bets.

Jake: Wow.

Tobias: “Apple” from Drew Ector. Drew also says, “Saudi Aramco.” There you go. There’s an off the run guess. Yeah. That’s an oil and gas one. That’s probably peak oil, peak margin, peak multiple on peak oil.

Bill: I don’t know, man. $30 trillion is a whole lot of money.

Tobias: Tesla. There was the Tesla guess.

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