AWS & Tesla
Because these two investment theses are so similar and because this exercise is so much fun, I will count them as one.
To elaborate that train of thought just a bit, while Amazon (AMZN) ecom is ~30 years old, AWS is really only about ten years old, as the chart below indicates. It only really found product market fit circa 2013, and, as we will see in a moment, the same could be said for Tesla (TSLA). I believe both have incredibly long runways for growth in the next 10-20 years.
Cloud Spend Remains Only About 10% of Total IT Budgets Globally
- "And people sometimes forget that 90-plus percent of global IT spend is still on-premises. If you believe that equation is going to flip, which we do, it’s going to move to the cloud." - Andy Jassy, CEO, Amazon
- In the future, it's likely that 90% of workloads will occur natively in the cloud, and AWS will be integral in supporting the compute and storage required for those workloads. Only about 10% of workloads occur in the cloud; yet, AWS already generates ~$85B in annual sales.
- AI applications and virtual realities will require incredible amounts of compute and storage, further buttressing the case for AWS to continue its healthy growth for decades to come.
- Beyond simply providing infrastructure compute and storage, AWS's marketplace could grow into a large business as well as vertically integrated applications that users may want to take off the shelf within AWS (as opposed to buying from an independent SaaS vendor). Both of these components of the Amazon business represent vectors for further growth over the long term.
- Heretofore, Tesla has sold ~4.5M vehicles, and there are a total of ~1.45B vehicles on the road globally. Incredibly long runway ahead.
- Tesla FSD (currently in beta) costs $200/month, and there are presently ~500k total subscribers (I do not believe anyone truly knows this number). L.A. Stevens believes this to be a monopoly product. There is no other EV manufacturer that has both the fleet scale, with installed FSD hardware, nor the training data that Tesla possesses, and nobody comes close. There's some chance that no other manufacturer will come close for decades to come!
- Utility-scale energy storage and management (which replaces fossil fuel powered-peaker plants) is arguably the hardest problem that needs to be solved by humans presently (alongside creating personalized, AI-driven cancer therapeutics). Tesla Energy provides utility-scale storage and could have a vastly longer runway for growth than most realize.
- Tesla has ~$24B+ in cash and ~$900M in non-recourse debt, secured by automotive assets.
Tesla Energy Storage Deployments