Tesla (NASDAQ: TSLA) is a young giant stock with electric car technology yet to be proven profitable in future. The company has been “losing” money or making net loss over the past 10 years, mainly due to tremendous R&D expenditure and investment to expand its business.
For emerging technology stocks (eg past young giants such as Alibaba, Facebook, etc), usually first few years or even longer period, company may suffer losses. Tesla has been “losing” money in terms of profit but sales or revenue has been increasing.
Young giant stocks may need to “burn money” in exchange for bigger market share, so that next time it can become an economic moat to start making big money. So, smart investors need to read in between the lines for financial reports, not just profit or loss.
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