The race for the title of the world’s biggest company is heating up, with Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT) all vying for the top spot, a position Apple held from 2011 to 2023.
Tesla (NASDAQ:TSLA), led by its dynamic CEO Elon Musk, is also in the running. Musk believes Tesla could surpass a $30 trillion market value in the future. Previously, Musk claimed Tesla could become the world’s largest company, exceeding the combined market value of Apple and Saudi Aramco. This article explores whether Tesla can outpace Nvidia in market value.
Both Tesla and Nvidia are key players in artificial intelligence (AI), led by visionary leaders. Musk, known for his bold proclamations, described himself as “pathologically optimistic” at Tesla’s 2024 annual meeting, where shareholders approved his substantial $45 billion compensation package.
Elon Musk Predicts $25 Trillion Boost from Optimus
At the recent shareholder meeting, Musk stated that Tesla’s Optimus humanoid robot could add $25 trillion to the company’s market cap. This is not the first bold prediction from Musk, whose compensation is partially tied to Tesla’s market cap. He previously forecasted 1 million robotaxis by 2020, a target still unmet but set to be revealed on August 8.
Musk also projected Tesla’s vehicle production to grow at a 50% CAGR, reaching 20 million units by 2030. However, the company has acknowledged that this growth rate is unachievable after missing targets for two consecutive years.
In 2022, Musk suggested Tesla could be valued higher than Apple and Saudi Aramco combined, positioning it as an energy and tech giant. His claims about achieving full autonomy have been less convincing, with full self-driving (FSD) features remaining incomplete. Although Musk predicted FSD would eventually cost $100,000, the price was recently reduced from $15,000 to $8,000 to encourage adoption.
Tesla Bulls Expect It To Become The Biggest Company
Despite skepticism about Musk’s $30 trillion market cap prediction, many Tesla enthusiasts believe it will eventually become the world’s largest company. Morgan Stanley analyst Adam Jonas suggested that Tesla’s Dojo supercomputer could add $600 billion to its market cap, exceeding Tesla’s current valuation. Cathie Wood of ARK Invest, who Musk praised for her understanding of Tesla’s business, sees it as the “biggest AI project” globally. ARK Invest recently revised its Tesla target price to $2,600 by 2029, with a bear case of $2,000 and a bull case of $3,100, all significantly higher than the current price.
Tesla Once Surpassed Nvidia’s Market Cap
The idea of Tesla surpassing Nvidia’s market cap might seem far-fetched now, but Tesla was more valuable than Nvidia for over two years before Nvidia overtook it in January 2023. Since then, Nvidia has surged ahead, reaching a $3 trillion valuation after its fiscal Q1 2024 earnings report in May 2023. Tesla’s market cap peaked at over $1.2 trillion in late 2021 and hasn’t surpassed $1 trillion since.
Can Tesla Become The World’s Biggest Company?
For Tesla to become an AI powerhouse, it needs to demonstrate tangible results. Tesla reached a $1 trillion valuation in 2021 due to impressive delivery growth and strong margins. However, its operating margins have since dropped to mid-single digits, and the company is struggling to maintain delivery growth, with Q1 shipments falling short.
Musk’s recent announcements haven’t had the same market impact as before, and Tesla must deliver concrete results to regain its $1 trillion status and aim for the top. Despite Musk’s threats to leave if his compensation wasn’t approved and his own AI startup competing with Tesla, it would be unwise to dismiss Tesla’s potential to become the world’s largest company under his leadership. If Nvidia can achieve a $3 trillion valuation by selling AI chips, Tesla could also reach the top by commercializing its technology in humanoids, supercomputers, autonomous driving, and robotaxis.
Featured Image: Megapixl
