Now here’s a topic that’s being beaten to death in the media. Is Tesla Motors Inc (NASDAQ:TSLA) the new Apple Inc. (NASDAQ:AAPL)? It’s probably too early to tell, but bulls are drawing the similarities while bears are saying, “Hold on a minute.” Eric Dutram of Zacks has collected both sides into some interesting lists.
Let’s start with the similarities, and I’ll just add on my two cents to some of these. Shares of Tesla have risen an impressive 400 percent since last year, and the company is starting to garner the attention of major institutional investors. Apple Inc. (NASDAQ:AAPL) is still toward the top of many institutional portfolios, but the stock is no longer quite as shiny as it was. Tesla, on the other hand, has just begun to glow within the last six months. Major investors like Fidelity’s Contrafund have been dumping shares of Apple and snapping up shares of Tesla within the last couple of quarters.
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And of course we have some similarities between Tesla Chief Executive Officer Elon Musk and former Apple CEO Steve Jobs. Both became known for their charisma, and both have had visions which drove the development of their companies. Unlike Jobs though, Musk has more than one vision and is involved heavily in more than one company. First he turned PayPal into an empire and then moved on to Tesla Motors Inc (NASDAQ:TSLA), SpaceX and SolarCity Corp (NASDAQ:SCTY).
Tesla and Apple have product similarities
Also Apple has yet to focus on the low end or mid-range markets of its field, although it looks like that’s changing. Steve Jobs has probably been rolling in his grave over these rumors of a low cost iPhone, but Elon Musk has the mass market directly in his field of vision. Tesla is planning a mass market Generation III vehicle, although as with most forms of technology, the company started out by focusing purely on the high end.
And of course neither Apple Inc. (NASDAQ:AAPL) nor Tesla invented their products. They simply improved upon products made by others. Of course there has been a much bigger gap in innovation time for Tesla.
Tesla, Apple and money
Tesla’s naysayers still aren’t convinced that the company will be able to keep making money. This year it is expected to post another loss for the full year, although the first quarter was its first profitable one. This argument is in the differences between Apple and Tesla, but this isn’t a fair comparison at all because Tesla has only been around for 10 years, compared to Apple’s more than 30-year history.
The next difference that’s cited between the two companies is the government aid that Tesla Motors Inc (NASDAQ:TSLA) received to get started. However, I would put this as another similarity because of some research done by economist Mariana Mazzucato, who shed some light on the role the government plays in funding innovation. She said Apple Inc. (NASDAQ:AAPL) also received funding from the government in its early days.
Would it really be a good thing to be the next Apple?
Of course the question should always be asked about how it’s even possible to compare the two companies because they are so completely different, but the comparison seems to be more about the principle of if than anything else.
And finally, some investors question whether it would be such a good thing for any company to be the next Apple Inc. (NASDAQ:AAPL) because of what’s happened to its stock price since late last year. But once again, companies come and companies go. Apple declined for a while before coming back. This is the natural cycle of business.
The real question here is whether Tesla Motors Inc (NASDAQ:TSLA) will become the next big thing. Will it be the next darling of Wall Street? Will it ever get to the point where the naysayers are virtually quieted?
It’s still too early to tell.