Tesla has been a favorite among investors. And it’s not hard to see why: shares of the electric car giant have returned a jaw-dropping 2,044% over the past five years.
While that means long-term investors are laughing all the way to the bank, it’s important to remember that big swings can happen in both directions.
Tesla shares are already down about 9% in 2022.
Still, Goldman is quite bullish on the company. On Jan. 10, one of its analysts Mark Delaney named Tesla a top pick for 2022. He reiterated a buy rating on the company and raised his price target to $1,200.
Considering that Tesla shares trade at around $1,050 apiece at the moment, the price target implies upside potential of 14%.
“We believe that Tesla, given its leadership position in EVs, and its focus on clean transportation more broadly will be best positioned to capitalize on the long-term shift to EVs,” Delaney wrote in a note to investors.
He’s also optimistic about the company’s improving profitability and production figures.
In Q4, Tesla delivered 308,600 EVs, marking a new record.
“We expect Tesla to expand margins in the intermediate term as it ramps the important Model Y product as well as new factories in Berlin, Germany and Austin, Texas, and in the long-term as it increases its mix of software revenue,” the analyst added.
Micron Technology (MU)
Semiconductor chip makers have largely done well for investors since the onset of the pandemic.
Micron Technology, for instance, is now trading about 70% higher compared to two years ago.
And Goldman Sachs sees further upside ahead in the chipmaker.
The investment bank has a buy rating on Micron and recently raised its price target from $101 to $116, suggesting upside of 19% from current levels.
Micron is one of the leaders in memory and storage solutions. In 2021, the company brought in $27.7 billion of total revenue.
And things have continued to improve in Micron’s fiscal 2022.
For Q1, ended Dec. 2, 2021, the company generated $7.7 billion of revenue, representing a 33% increase year over year. Adjusted earnings, meanwhile, jumped 177%.
Micron earns about 73% of its revenue from dynamic random-access memory products. And Goldman Sachs likes the potential of that market.
“Following recent industry checks, we are incrementally more positive on the DRAM supply/demand outlook due to favorable supply dynamics and an improving demand outlook,” commented Goldman analyst Toshiya Hari earlier this month.
Match Group (MTCH) and Bumble (BMBL)
The stay-at-home environment caused by the pandemic has fueled the growth at several online dating companies. But that doesn’t mean they’re market darlings at the moment.
Shares of Match Group — which has a portfolio of brands including Tinder, Match, and Hinge — are down 19% over the past 12 months. Bumble — the parent company of Bumble and Badoo apps — has fallen over 50% since the stock started trading last February.
But Goldman Sachs expects a rebound in these two names.
“Match Group & Bumble have underperformed the S&P 500 in '21 and we see the current valuation as an attractive entry point into a multi-year compounded growth story,” wrote analyst Alexandra Steiger last week.
Steiger upgraded both companies from neutral to buy.
Her price target on Match is set at $157, or 34% higher than where the stock sits today. For Bumble, Steiger’s price target is $54, implying upside of more than 60%.
Both companies have been delivering solid growth figures. In Q3 of 2021, Match Group’s revenue increased 25% while Bumble’s revenue rose 24%.
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Fine art as an investment
Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.
That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.
Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.
And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.
On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.
Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.
Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.