5 Growth Stocks to Buy According to Alex Sacerdote’s Whale Rock Capital

2. Tesla, Inc. (NASDAQ:TSLA)

Mr. Sacerdote’s Stake Value: $593 million

Percentage of Mr. Sacerdote’s 13F Portfolio: 3.87%

Number of Hedge Fund Holders: 60

Tesla, Inc. (NASDAQ:TSLA) is thought of pioneering the mass production of electric vehicles inside and outside the United States. Led by Mr. Elon Musk, who has become one of the world’s richest men due to his company ownership, Tesla, Inc. (NASDAQ:TSLA) primarily focuses on electric vehicles but it also provides other products such as batteries and home systems.

The company earned revenue of $13.76 billion and non-GAAP EPS of $1.86 in its third quarter of this year, beating analyst estimates on both counts. Mr. Sacerdote held 873,195 Tesla, Inc. (NASDAQ:TSLA) shares worth $593 million at the end of the second quarter of this year. At the same time, 60 out of the 873 hedge funds surveyed by Insider Monkey held a stake in the company.

Tesla, Inc. (NASDAQ:TSLA)’s largest shareholder by the second quarter was Catherine D. Wood’s Ark Investment Management who held 5.4 million shares worth $3.7 billion.

In a third quarter investor letter, Worm Capital LLC had the following to say about Tesla, Inc. (NASDAQ:TSLA):

“Our core portfolio as of this writing—TSLA, SPOT, SHOP, ABNB, and AMZN—are all premier examples of companies that use the concept of aggregation of marginal gains to continuously improve their value proposition for customers. After all, what is innovation if not just a continuous search for fractional advantages in business?

The way we see it, Tesla is perhaps the generational example of the marginal gain aggregation theory. It’s also been our largest position for several years now. There are many ways to characterize and value this business (see previous letters for longform write-ups), but perhaps the best way to think about the company is that it is a highly vertically-integrated software and hardware firm that’s devoted entirely to aggregating marginal gains across its organization. The goal? Lower costs, improve thruputs, and dramatically enhance the value proposition—at scale—for consumers…”

Tesla, Inc. (NASDAQ:TSLA)’s have grown by a remarkable 116% over the past year and in an October analyst note, RBC Capital raised the company’s price target to $800, citing healthy margins and potential gross margin improvement due to software products.