Does Tesla (TSLA) Offer a Compelling Reward-To-Risk Opportunity?

Loomis Sayles, an investment management company, released its “Global Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund returned -3.35% compared to -1.32% for the MSCI ACWI Net Index. Stock selection in consumer staples, communication services, and healthcare sectors, and allocations to the information technology and healthcare sectors positively impacted the fund’s relative performance. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Loomis Sayles Global Growth Fund highlighted stocks such as Tesla, Inc. (NASDAQ:TSLA). Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, as well as energy generation and storage systems. The one-month return of Tesla, Inc. (NASDAQ:TSLA) was 18.70%, and its shares gained 89.32% of their value over the last 52 weeks. On May 23, 2025, Tesla, Inc. (NASDAQ:TSLA) stock closed at $339.34 per share with a market capitalization of $1.09 trillion.

Loomis Sayles Global Growth Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2025 investor letter:

“Founded in 2003, Tesla, Inc. (NASDAQ:TSLA) is a global leader in the design, manufacturing, and sales of high performance fully electric (battery) vehicles (EVs). The company’s automotive unit sells its products directly to customers through its website and retail locations and continues to grow its customer-facing infrastructure through a global network of vehicle service centers, mobile service technicians, body shops, Supercharger stations, and Destination Chargers to accelerate widespread adoption of its products. Tesla also designs, manufactures, sells, and installs solar energy generation and energy storage products to residential, commercial, and industrial clients through its energy generation and storage unit. The company generated approximately 90% of its sales from its automotive segment and 10% from its energy generation and storage segment in its 2024 fiscal year. From a geographic standpoint, the US and China are the company’s two largest markets and accounted for approximately 49% and 21% of 2024 sales, respectively, while the rest of the world collectively accounts for approximately 30%.