Tesla vs the Tech Giants

surfer guy
2022-03-19

TSLA – One-trick Pony?

TSLA is essentially an Electric Vehicle (EV) company, albeit a very good one, and market leader. It innovates to control the whole ecosystem, e.g. fully self driving (FSD) software, batteries and charging tech, onboard entertainment, etc., but it is still within the confines of the EV ecosystem. While the sector is projected to have up to 23% CAGR through to 2027, the outlook beyond is murky.

What is certain is EVs will be the dominant form of vehicle sometimes in the future, and by that time, TSLA might find itself in a mature, saturated market with limited growth, just as legacy automakers the likes of Toyota, GM or Volkswagen faced today.

Further reading: Tesla Stock: 2022 Is The Moment Of Truth 

5 Chinese Tech – Giants in their own fields

The five Tech giants are mammoth and have wide-moats in a diverse range of business areas, fuelled by online and Internet, which I think will not go away for decades to come. Their core business areas are summarised in the Table below.

Table showing the core business of the 5 Tech Giants

Further reading: Chinese wide-moat stocks at a discount

Where is the Pot of Gold?

Thus, if I have to choose between Tesla or the 5 Chinese Tech Giants to buy and hold, implying long term of 10 or more years, I would rather diversify my investment in different sectors than hedging my bet in just one sector, as the saying goes: "Plant many seeds, and see which ones grow and thrive". Practically, the Chinese Tech stocks are also in evergreen sectors, where we are consuming them daily or on more frequent basis, than buying or doing maintenance on EVs.

No doubt, the Chinese Tech stocks have seen their price and capitalisation beaten down recently and only started to be on the mend. However, in longer-term investing horizons, such price corrections and dips are to be expected, before the upwards trajectory resumes.

What matters are longer term growth and gains, and the proverbial "pot of gold" from the Chinese Tech giants might just be larger and deeper compared to Tesla, in my view.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • MamieBenson
    2022-03-19
    MamieBenson
    For me, I will choose to buy shares of Chinese technology companies. This is undoubtedly a very suitable choice. At present, the stock price is very low and has great upward potential.
    • Gracejul: 
      Yes agreed!
    • surfer guy: 
      Agree, yes, the price has dropped, some more than 50% than all time high, so if the fundamentals are still good, likely more upside
  • PageDickens
    2022-03-19
    PageDickens
    Very reasonable analysis! Thank you for sharing. I think so, too. Tesla's share price will rise steadily, while the shares of Chinese companies will rise quickly.
    • surfer guy: 
      Thanks! Like how you put it, the need for speed is crucial [Cool]
  • snoozi
    2022-03-19
    snoozi
    I'm very excited about Tesla's self-driving technology, let's hope it breaks through.
    • KevinKellyReplysurfer guy: 
      Yes, I also want to buy one as my transportation tool.
    • surfer guy: 
      Yes FSD is something I am excited too and will be mainstream or part of any vehicle in the future. used to be something out of sci-fi movies  but not anymore
  • 哆啦Ella
    2022-03-21
    哆啦Ella

    good article[Love you] 

  • MurrayBulwer
    2022-03-19
    MurrayBulwer
    I'm very optimistic about Tesla. Tesla is the absolute number one in the electric vehicle industry!
    • surfer guy: 
      Definitely the EV leader, and has inspired a truckload of other EVs companies and pretenders to the crown
  • NinaEmmie
    2022-03-19
    NinaEmmie
    Why not buy them all? I think both options are good.
    • surfer guy: 
      Yes, agree we could buy both in reality, this is just more for if you have limited funds and like to choose one over the other [Smile]
Leave a comment
1
2