Tesla could be the next Amazon, says Gene Munster
Tesla (NASDAQ: TSLA) could be the next Amazon (NASDAQ: AMZN), Gene Munster, co-founder and managing partner of Loup Ventures, told CNBC on Friday. The former Piper Jaffray tech analyst turned venture capitalist is best known for his accurate predictions on Apple (NASDAQ: AAPL).
Despite Amazon shares nearing the $1,000 milestone, a record high for the company, the investor says he likes Tesla better. "Tesla is a controversial story," Munster said on " Squawk on the Street ." "People don't understand what this company's mission statement is," he said. Much like Amazon in its early days when the company was 'just' selling books, he said.
"Most people think of [Tesla] as an electric car company, but their mission statement is to accelerate the globe's transformation to renewable energy, " he said. "When you start thinking about that you can see them grabbing market cap from energy companies which are some of the largest market-cap companies," said Munster.
Tesla's market capitalization was about $53 billion on Friday morning while Amazon's was nearly $475 billion. In the energy sector Exxon Mobil (NYSE: XOM)'s market cap was more than $345 billion. AMZN shares have risen by nearly 39 percent over the last year while TSLA has climbed by about 43 percent and XOM has dropped more than 9 percent.
Elon Musk 's vision for Tesla will require a lot of capital but Munster says he thinks the company will get there. And while Amazon is the tech stock of the moment, there are limitations to its growth, he said. One of those limitations is maintaining market share.
"I think obviously somebody buying the stock at $1,000, they're hoping it goes to $2,000 so I think the opportunity again is the market share in online, that's an increase and it would put Amazon at $1 trillion in revenue if they get to that," said Munster.
In the cloud space Amazon Web Services is faced with increased competition which poses a real risk to the cloud portion of Amazon's business, he said. "The specific reason is Azure from Microsoft (NASDAQ: MSFT) is gaining share, and Google is making a big push within that ... so that's an area that Amazon had an early lead on but is not maintaining the same market share they had in retail," said Munster.
Tesla on the other hand has few challenges and more opportunities, he said. "I'll give you one quick example, this race for batteries. There's a problem about just the elements of the copper and the nickel to build the batteries and they have procured some of that," said Munster. "If someone wants to build the batteries, they need financing to get there. I think the markets will give him that leverage to build this future," he said.
"I would, pun intended here, buckle up. This is going to be a bumpy but positive ride for Tesla in the years to come."
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