Baron predicts remarkable expansion for both firms, emphasizing that there is substantial room for development. In a recent appearance on CNBC’s “Squawk Box,” Baron shared his optimistic outlook, underlining the substantial opportunities that lie ahead for these pioneering enterprises.
Ron Baron’s optimism shines brightly when it comes to Tesla, the electric vehicle (EV) manufacturer led by Elon Musk. He confidently stated that he believes there is “10 times more to go” for Tesla’s growth. This assertion follows Tesla’s shares reaching a record closing price of $949.92, driven in part by robust EV sales data from China for the month of May. According to the China Passenger Car Association, Tesla sold 11,095 locally-made Model 3 electric sedans to Chinese customers in May, marking a substantial increase from April’s dip, which was attributed to COVID-19-related disruptions.
Baron’s investment firm, with over $32 billion in assets under management, holds more than 1.6 million Tesla shares. These shares were acquired at an average cost per share of $219.02, highlighting Baron’s early investment in the company. He previously anticipated a potential return of 20 times the initial investment in Tesla. As of the recent market close, Baron’s stake in Tesla was valued at a staggering $1.5 billion.
Ron Baron’s optimism extends beyond Tesla to SpaceX, Elon Musk’s aerospace company. Baron predicts SpaceX, a privately held entity, expanding by a multiple of 20 over the next decade. This optimistic projection follows SpaceX’s historic achievement of launching a pair of NASA astronauts on May 30, marking a significant milestone for the company and a crucial advancement for the U.S. space program.
Baron Capital, Ron Baron’s investment firm, owns 814,595 shares of SpaceX, a stake that was initially acquired in September 2017 and further increased in December. This substantial investment reflects Baron Capital’s confidence in the future success of SpaceX.
Diverse Portfolio and Positive Market Outlook
Ron Baron’s investment firm manages a diverse portfolio, encompassing various industries beyond Tesla and SpaceX. Significant holdings include 7.4 million shares of Charles Schwab, 4.8 million shares of Hyatt Hotels, and 2.3 million shares of index giant MSCI Inc. The firm has reported portfolio growth of 8% to 9% in the current year, demonstrating the efficacy of its investment strategy.
Baron remains optimistic about the overall market, noting that his company has increased its positions in several firms throughout the year, seizing opportunities as they arise. His confidence in the market’s potential underscores his commitment to capitalizing on favorable investment conditions.
Ron Baron’s unwavering faith in the future success of Tesla and SpaceX reflects his belief in the transformative impact of these companies. With Tesla potentially having tenfold growth potential and SpaceX poised for substantial expansion over the next decade, these predictions highlight the innovative prowess of Elon Musk’s ventures in the electric vehicle and space exploration domains. Baron’s investment approach aligns with his optimistic outlook, emphasizing the immense opportunities that these companies present in the evolving landscape of technology and innovation.