Investors can’t often gain equal exposure to multiple, highly profitable sectors with one stock. According to Morgan Stanley analyst Adam Jonas, however, Tesla (NASDAQ:TSLA) stock offers investors exactly that opportunity.
Jonas sees a TSLA stock investment as a play on both automotive and tech. However, it doesn’t even stop there. The analyst also recognizes the company’s strong ties to the alternative energy sector, especially at a time when green technology is rising in prominence.
TSLA appears to have cooled off after last week’s winning streak. Shares dipped today following some turbulence, closing down 1.5%. However, the stock is still leaving March in a substantially better place than it was at the start of the month. It’s up more than 20% for the past one month. It’s also likely to keep rising.
TSLA Stock: Three Sectors, One Company
Recently, Jonas reiterated his $1,300 TSLA stock price target, maintaining a “buy” rating. As noted, the reason for Jonas’ bullish attitude toward Tesla is that it’s a three-for-one play on profitable sectors. “What we’re seeing emerge over the course of this year is Tesla as a renewable energy on-shore infrastructure company,” the analyst said in a note yesterday.
Jonas raises a valuable point. While we think of Tesla first as an electric vehicle (EV) producer, the company’s work in other areas of tech have strong applications for the renewable energy field. Additionally, Tesla’s energy storage solutions are likely to play an increasingly important role in the country’s quest for energy independence.
It isn’t just the U.S. that will be making use of the tech, either. For example, an Australian state-owned utility recently selected Tesla’s Megapack batteries for a $113 million project to back up the country’s wind and solar power. This could be a preview of what’s to come for other countries.
Nowadays, most TSLA stock news centers around the company’s EV production and distribution. Even highly bullish analysts like Wedbush’s Dan Ives have focused on vehicle expansion in recently months. Jonas is one of the first Wall Street voices to call attention to Tesla’s renewable energy applications — and he is absolutely right to do so.
Energy Security Equals National Security
There’s another quote from Jonas’s report that investors need to consider: “Energy security = national security.” This stresses the importance of energy security as a broader market trend. In fact, it’s already shaping public policy. Yesterday, news broke that President Joe Biden may use the Defense Production Act to spur battery metals mining. For EV producers, this is a significant boon. But the larger message is that the U.S. is prioritizing energy independence, seeing EVs as a key component.
Tesla is commonly regarded as the world’s leading EV producer. However, as Jonas highlights, it also has holdings in renewable energy production and storage. Looking forward, TSLA stock appears to be a great play on multiple sectors.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
