Ferrari N.V. (RACE): A Bull Case Theory
Photo by M on Unsplash
Porsche and Ferrari both build high-performance, high-prestige cars, but only one commands mythological status in the eyes of the market. While Porsche is undeniably profitable and respected, with a backlog of eager buyers, it still grapples with convincing investors it's a luxury brand. Ferrari, on the other hand, exudes effortless exclusivity — its brand is its moat, requiring no explanation, no reinvention, and certainly no scaling to justify its premium.
When Porsche went public in 2022, it did so amid much fanfare, billed as the German Ferrari and achieving a €75 billion market cap, briefly even eclipsing its parent, Volkswagen. Yet the structure of the IPO revealed the reality: Porsche AG remains 75% owned by VW, which is controlled by Porsche SE, the family holding of the Porsche-Piëch dynasty that itself owns a stake in VW. The supposed 'unlock' of value is tangled in circular ownership, leaving the equity story diluted by complexity. In contrast, Ferrari's 2015 spin-off from Fiat Chrysler was clean and surgical. Investors bought direct access to the brand, without holding company baggage or operational entanglements.
One share equated one vote, one slice of the legend. Ferrari doesn't have to chase scale, electrification, or strategic pivots to remain compelling — its very identity as Ferrari is self-sustaining. That clarity and purity are what the market rewards: Ferrari trades as a luxury icon; Porsche, despite all its engineering prowess, still trades as a car company. The distinction isn't performance — it's perception, and Ferrari owns it.
Previously, we covered a on Axon (AXON) by the same author, emphasizing its AI-driven ecosystem for law enforcement, strong recurring revenue, and ambitious vision to become the global public safety OS. Despite a premium valuation, Axon's high-margin TASER segment, scalable cloud offerings, and clean balance sheet position it as a long-term compounder and has appreciated by approximately 5% since our recent coverage. Ferrari (RACE) offers a contrasting angle, less about growth mechanics and more about brand purity.
Ferrari N.V. (RACE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held RACE at the end of the first quarter which was 37 in the previous quarter. While we acknowledge the risk and potential of RACE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.
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