Munro Partners, a Melbourne-based money manager overseeing approximately $6.3 billion in assets, has significantly reduced its investment in Tesla, citing valuation concerns. While maintaining investments in other tech giants like Nvidia, Meta, and Alphabet, Munro has drawn a firm line under Tesla, indicating a reluctance to buy the stock at its current price. Munro Partners is an investment firm that manages funds across several strategies, focusing on identifying and investing in high-growth companies. The firm is known as one of Australia’s earliest investors in the ‘magnificent seven’ technology companies.
According to chief investment officer Nick Griffin, Tesla’s future prospects appear to be already factored into its share price, limiting potential gains for investors. He pointed out that Tesla’s price-to-earnings ratio is around 190 times, while Alphabet, Google’s parent company, trades at a multiple of 17 times earnings. Griffin highlighted that Alphabet offers exposure to various emerging technologies, including autonomous vehicles, cloud services, YouTube, robotics, and artificial intelligence, all of which are not fully reflected in its stock price.
Despite Munro’s hesitation, Morgan Stanley has reiterated an “overweight” rating on Tesla, setting a price target of $US410 and a bull case scenario of $US800. Morgan Stanley analysts point to Tesla’s strong positioning in physical AI, encompassing autonomous vehicles, humanoid robots, and energy storage, as key differentiators. They argue that Tesla is uniquely positioned in data, robotics, energy, AI, manufacturing, and supporting infrastructure.
Munro’s Global Growth Fund reported returns of 5.5 per cent last month and 16.1 per cent for the June quarter. Nvidia, Oracle, and Meta were key contributors to the fund’s performance. The fund manager had previously invested in Nvidia at $US20 per share and further increased its position in mid-2023. Since then, Nvidia’s stock has surged by over 650 per cent, trading around $US176.75.
