Tesla’s stock emerges as megacap rival to Apple

In a year that has seen high-flying technology stocks with lofty valuations battered, Tesla shares have emerged as an unlikely rival to Apple.

Apple’s immense cash flows and commitment to return money to shareholders via dividends and buybacks have made it a favourite.Tesla is down 22 per cent this year while Apple has fallen 15 per cent. By contrast, Microsoft, Alphabet and Amazon have all declined 29 per cent or more, roughly the same as the Nasdaq 100 Index.

“The correlation between the two is surprising, but when you consider that Tesla is the only game in town for electric vehicles, that makes it unique,” said Eric Clark, portfolio manager at Accuvest Global Advisors. “Other big tech names are in software or cloud, which are more competitive markets, and I think people underestimate the appeal of a pure play in a particular thematic.”Apple and Tesla are similar in that they have huge market values -- $US2.

Those attributes -- and the cult followings that their products enjoy -- have made both stocks among the most popular for retail traders. Apple and Tesla were by far the most purchased stocks by mom-and-pop investors over the past five days, Vanda Research said on September 21.

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