Tesla Bull Advises EV Giant Investors To Limit Emotion Tied To The Product: 'I Love Starbucks But I Wouldn't Own SBUX Stock'

Fund manager Gary Black on Monday advised Tesla Inc. TSLA investors to “limit the emotion” tied to the product and look at the stock analytically.

What Happened: “I love Starbucks but I wouldn’t own Starbucks stock,” Black said while urging Tesla investors who like the company’s products to look at the EV giant’s stock analytically with a “strong dose of discipline.”

According to The Future Fund Managing Partner, falling in love with the company’s product which causes them to fall for the stock is one of the biggest mistakes made by investors.

Relying on company management’s forecast on production instead of demand is another key mistake that many make, he said. “They rely on management's forecasts about production rather than demand, and assume winner take all and fail to consider likely competitive responses,” Black said in a post on social media platform X.

Why It Matters: Black, however, is optimistic for Tesla himself.

The company needs to show growth in delivery volumes while also demonstrating the superior capability of its full self-driving (FSD) driver assistance software, failing which the profit-earnings ratio will drop, Black said in another post. However, the fund manager is optimistic that the introduction of a new and cheaper Tesla vehicle in the first half with a new form factor will expand its total addressable market.

Black opined that the vehicle ought to be a hatchback priced between $25,000 to $30,000 to expand the company’s market. Without a different form factor, the new vehicle will only destroy earnings, he said.

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