Don’t jump off the ship just yet!
At least that seems to be the sentiment of popular tech analysts Daniel Ives and Strecker Backe of investment firm Wedbush, who say, “the EV party is just beginning,”
The two felt compelled to publish a note on Thursday, making such a proclamation and urging investors to hang on amid the massive tech selloff that’s seen shares of companies like Tesla (TSLA) and NIO (NIO) shed more than 33% and 37%, respectively, over the past month.
The analysts argue that within EV stocks, in particular, the slump has been more general “risk-off” than sell-off, mostly compounded by sales weakness in the key Chinese market in January and the global semiconductor chip shortage.
But, despite the carnage in tech over recent weeks that has crushed stocks sector-wide for a host of reasons beginning with inflation, the Wedbush analysts believe things will normalize throughout the course of March. In the short term, Ives and Backe believe China will be “the linchpin of growth” for the EV market, with “eye popping demand” in 2021 and 2022 giving Tesla, with its Gigafactory 3 in Shanghai, a major competitive advantage.
The two are still very much bullish about the long-term prospects of EVs as well, projecting a $5 trillion market opportunity over the next 10 years.