Based on their parabolic moves and high valuations, both Zoom and Tesla fit the criteria commonly associated with asset bubbles. Under this scenario, Zoom looks better situated than Tesla, because Zoom has more future passive flow potential. In terms of factor exposures, Zoom and Tesla aren’t exactly twins, but they are closely related. But my guess is the penalty would be less severe for Zoom, because Zoom has better fundamentals to go with its high valuation. Two key scenarios to consider now are: (i) asset bubbles getting bigger and (ii) asset bubbles popping.

Source: Forbes January 24, 2021 15:11 UTC