During his appearance on CNBC under the banner ‘Squawk on the Street’, Jim Cramer was specifically questioned on Apple Inc (NASDAQ:AAPL) and Tesla Motors Inc (NASDAQ:TSLA) and he did come up with clear and interesting perspectives on both counts. In what appears to be a roller-coaster ride wherein shares of Apple Inc (NASDAQ:AAPL) are down by 6% and those of Tesla Motors have plunged by 13%, it is but natural for investors to find themselves at cross-roads, wondering which path to embrace.
For Apple Inc (NASDAQ:AAPL), Cramer opined that that the best course of action for investors would be to book profits and move on for the time being. Given the phenomenal growth that the company has undergone over the years, investors will have already accrued substantial financial gains and hence this is the right time for booking profits and making a lucrative exit.
Tesla Motors Inc (NASDAQ:TSLA), on the other hand, does not boast of the same fundamentals as the tech giant and is turning out to be a perfect example for validating Newton’s law of gravity – what goes up must come down. Having surged 575% over the year gone by, Tesla shares are currently poised at $237 and are expected to further decline to $200, as per Goldman Sachs’ research estimate.
However, there is a flip side to the story too which predicts that if Tesla Motors Inc (NASDAQ:TSLA) succeeds in realizing its ambitions on a global scale, its share value could shoot up to as high as $478. Goldman Sachs went on to state in its report –
“Not surprisingly, this scenario implies the shares of Tesla appear to be significantly overvalued, even though the implied share price of $66 is the level Tesla shares were trading at less than a year ago.”
Jim Cramer attributed Tesla Motors Inc (NASDAQ:TSLA)’s decline to falling oil prices as also the fact that it was yet to woo the rich segment of the community with its concept of eco friendly vehicles.
This article has been written by Vinita Basu.