Future Fund Managing Partner Gary Black defended the decision to slash the fund’s stake in Tesla Inc. (NASDAQ), attributing it to a shift in investment strategy and performance metrics.
In a post on X, Black detailed the criteria for the fund’s sell discipline: hitting price targets, changes in investment thesis, high near-term expectations, or shifts in strategy or CEO.
The fund trimmed its TSLA position from 12.2% in September 2022 to 3.6% currently, during which TSLA stock fell 11% while the Nasdaq 100 surged 64%. NVIDIA Corp (NASDAQ) replaced TSLA as the fund’s number two position, bolstering performance.
Black underscored the fund’s adherence to research and valuation principles, noting their conservative Q2 TSLA delivery forecast, which was down 5% year-over-year actual versus down 10% expected. He highlighted potential upsides like a 20-25% annual increase in EV adoption and the launch of a $25,000-$30,000 Next Gen vehicle, alongside risks such as regulatory issues and earnings uncertainties for 2024 and 2025.
The move reflects a broader trend among investors, including former Speaker Nancy Pelosi, who sold Tesla shares while increasing her stake in NVDA. Tesla’s stock, a target for short sellers, recently surged after exceeding Q2 delivery estimates.
Analysts like Dan Ives of Wedbush see potential in Tesla’s AI-driven strategy, raising the price target to $300. Guggenheim’s Ronald Jewsikow also raised the target from $126 to $134 despite maintaining a Sell rating.
Tesla closed at $246.39 on Wednesday, up 6.54%, and continued to rise in after-hours trading. Year to date, Tesla’s stock is down 0.82%, according to Benzinga Pro.
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