The stock market’s performance has become more bifurcated this year. While high-flying tech stocks have driven the S&P 500 index to new highs, consumer spending headwinds have weighed on the performance of industry-leading consumer brands.
Two widely held stocks that have delivered subpar performance are Tesla (NASDAQ: TSLA) and Starbucks (NASDAQ: SBUX). However, both stocks recently jumped as new growth catalysts came into focus, and two Wall Street analysts believe now’s the time to buy. Here’s why these top stocks are poised to take off in the coming years.
1. Tesla
Tesla shares delivered phenomenal returns to investors over the last decade, but the stock has been flat over the last few years. It’s been challenging to sell more electric cars, with higher interest rates making financing more expensive, in addition to increasing competition. Despite the headwinds, Tesla stock is up 16% over the last three months as investors have also turned their attention to other promising opportunities in the near term.
Piper Sandler analyst Alexander Potter believes the stock is a buy heading into Tesla’s robotaxi unveiling scheduled for Oct. 10. A robotaxi service should be very profitable for Tesla over time, but it also highlights the opportunity in the company’s battery production, which is intended to reduce manufacturing costs and improve margins.
Tesla’s battery production is ramping up quickly. It produced 50% more 4680 cells in the second quarter than the first quarter. This will support the rapid growth Tesla is experiencing in its energy storage business while also potentially supplying millions of electric cars on the road, especially robotaxis.
Ark Invest believes that Tesla’s operating profit per kilowatt-hour deployed could be $466 for robotaxis compared to just $60 for normal electric cars. This fits into to the firm’s projection that Tesla will increase its profitability and send the stock to as high as $2,600 by 2029.
CEO Elon Musk believes the optimistic projection is possible. The world is shifting toward electric and autonomous transportation. Tesla’s…
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