From February 2009 to September 2012,
Apple (Nasdaq: AAPL)
shares had one of the most incredible run-ups Wall Street has
The stock rose 662%, vaulting from $90 a share to more than
$700 and becoming the most valuable company in the world in the
process. It was no coincidence. Those three and a half years were
perhaps the company's greatest stretch of innovation.
In 2009, the second iPhone was released. In 2010, the first
iPad was introduced. In 2011, Apple unveiled the iPhone 4S -
equipped with an interactive voice called "Siri" that enabled
users to browse the Internet and text friends without pressing a
Today, the iPhone and the iPad have become commonplace, and
imitations have sprung up everywhere. At the time, however, the
iPhone and iPad were new and hip - and accelerated the
revolutionary trend towards mobile devices.
Wall Street loves that type of innovation. Investors crave
owning a slice of the new and the hip. They want to get in early
on the company that's on the cusp of inventing the next big
has thrived in the past year.
So, Is Tesla the Next Apple?
Tesla shares have shot up an astounding 552% since last
February, when my colleague
added the stock to our
. The catalyst was the company's new Model S, the first-ever
luxury electric car with the charging capacity to be driven up to
300 miles at a time. With the Model S, Tesla founder Elon Musk
had essentially developed the first electric car with the
horsepower to match even the most powerful combustion engine of
any gas-guzzling vehicle.
Since the Model S debuted a little over a year ago, Tesla's
sales have soared. The company's 2013 sales quintupled its 2012
Expansion into Europe and China
should only help sales. And Tesla is inching closer and closer
each quarter towards profitability.
Yes, for all the hoopla surrounding Tesla, the company is
still not profitable. And yet the stock is showing no signs of
slowing down. That shows just how much growth and innovation move
the needle on Wall Street. A company that has never turned a
profit has risen more than 600% in a year based almost entirely
on its cool, cutting-edge image.
Now the pressure is on Tesla to come up with something.
As we've seen with Apple of late, even the most innovative
products eventually grow stale. There was a time when Apple's
top-secret product announcements delivered an automatic 10% to
13% boost to its share price in the weeks that followed. No
It's been a while since Apple introduced something truly new.
The latest versions of the iPad (this one's miniature!) or iPhone
(this one weighs less!) inspire little more than a collective
yawn on Wall Street these days. Even though the company is still
piling up profits hand over foot,
aren't likely to get on a roll again until the company starts
So it will be with Tesla.
Eventually, even the Model S will grow stale. Tesla will need
to prove it's not just a one-hit wonder to remain at the
forefront of investors' minds in the coming years.
Fortunately, the company seems to have plenty of new ideas in
the hopper. Plans to launch the first-ever electric SUV are in
the works. And the company hopes to launch a more affordable
alternative to the luxury Model S within the next three
As long as Tesla continues to innovate, it will remain
relevant. Right now, it's red-hot. Tesla projects an image of
being forward-thinking and hip.
And on Wall Street, image is everything.
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