Elon Musk is under fire again. This time, it’s due to Tesla (NASDAQ:TSLA) itself, and shareholders are facing quite the heat as the stock has tumbled almost 20% from its October peak. However, even lifelong Tesla bulls agree this time is different. That’s because Elon Musk’s handling of the recent earnings call was very pessimistic about the broader economy, and it caused his take on his own company to be surprisingly bearish. This, although it might be honest, is not the best thing right now for Tesla shareholders.
TSLA Stock’s Punishment Has Opens up a Buying Opportunity
The infamous “we dug our own grave with Cybertruck” quote is not something you’d want to hear if you are a Tesla shareholder. It was amplified by Elon’s constant ranting about interest rates and delving into macroeconomics instead of focusing on Tesla’s own business developments. Elon repeatedly emphasizing how rising interest rates impact the customer has painted a gloomy picture.
However, here is the thing — the stock already lost 20% of its value as punishment for that somber earnings call. Despite what happened last week, I remain bullish on Tesla. If you’ve read my previous columns, I have always recommended buying Tesla during the dips, as the stock eventually bounces back above $250, which I believe is fair value.
Tesla Is More Than Just the Cybertruck
Naturally, while the Cybertruck may not be what many expected it to be, it is still expected to generate positive cash flow within two years. Moreover, the broader Tesla business is much more than just the Cybertruck.
Plus, it is important to keep in mind that Tesla is dominating the EV space in the U.S. While there are many smaller competitors, they generally burn cash and aren’t worth your money. Other Chinese EV makers will not stand a chance in the U.S. market in the long run, either.
Thus, Tesla remains a very compelling choice. As Elon Musk said in the earnings call, once its products are sorted out in the U.S., they will push more internationally. That’s because regulations in the U.S. regarding experimental technology are much more flexible than in other countries.
EVs still only comprise around 1% of total vehicles on the road. With emission goals still in play, I believe Tesla will deliver more good news after this economic storm passes. Therefore, it is a buy — in my view. That’s because TSLA stock has already been punished enough for Elon’s gloomy earnings call. Plus, the broader company fundamentals remain strong, especially as the company continues to dominate the still-tiny EV market in the U.S.
Sure, rising interest rates will dampen demand, as Elon emphasized. But it’s already priced into the stock’s 20% plunge. Once rates stabilize, pent-up demand will return for Tesla’s industry-leading EVs.
The Bottom Line
I recommend using this opportunity to buy TSLA shares at a discount before the coming Cybertruck launch. It may not be as amazing as promised, but it will still generate buzz and reinforce Tesla’s brand strength.
Tesla remains the EV leader and still has massive growth potential as the secular trend toward electric vehicles continues. There is simply no serious competition here, at least in the United States.
The company also has a dominant position in a rapidly growing market, and the bear — Elon Musk himself — admits Tesla has plenty of room to scale production in Texas.
My position is investors should buy TSLA stock before the Cybertruck rollout. The latest dip is likely just a temporary storm that has overly punished Tesla shares. The company’s growth story is far from over, despite Elon’s recent economic hand-wringing.
On the date of publication, Omor Ibne Ehsan 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.