Editor’s note: This article was first published in February 2014; the reported Apple–Tesla talks, Apple’s cash pile, Tesla’s market value and share gains, and the $700 Apple share price, which predates its 7-for-1 split in June 2014, reflect that time. Apple never bought Tesla. These February 2014 views (before Apple’s 2014 and 2020 stock splits) are kept as a historical record. They are not investment advice.
Apple could be in preliminary talks to buy electric carmaker Tesla, according to TechCrunch today and other influential media. Tesla is going to be bought sooner or later. If not by Apple, it will be Google or one of the big carmakers, although everything suggests that Apple is currently the best-placed company to do it, and probably the only company in the whole world with $160 billion in cash ready to invest, so buying Tesla for around $25 billion (its current market capitalisation) would be no problem at all for Apple.
With growing competition in PCs, smartphones and tablets from manufacturers all over the world, Apple would be looking for a viable way to diversify its business into other fields.
Meanwhile, Tesla has reported its results after the market close, and we could say that, after doing so, nobody doubts any longer the promising future of this electric vehicle maker. Its shares have already soared 28% so far this year, and right now they are up more than 12% in after-hours trading.
For our part, Apple and Tesla remain two clear buy recommendations for investors with large capital and a conservative profile.
A few days ago we talked about the promising future of Google, a company we think could triple its share price in 10 years; in the same way, we could expect Apple to return to $700 a share in the short to medium term.
See also: This is what happened to a student who invested all his savings in Tesla
Featured image: Steve Jurvetson, CC BY 2.0, via Wikimedia Commons.
