Investor's Corner
Tesla (TSLA) bulls call out ‘excessive’ negativity as bears insist on alleged demand issues
Tesla (NASDAQ:TSLA) is currently heading full speed into what could potentially be a record quarter, and Wall Street analysts could not be more split over the company. Just a day after longtime TSLA bear David Tamberrino from Goldman Sachs downgraded the electric car maker’s stock, longtime Tesla supporter Ben Kallo has raised his price target on the company from $340 to $355 per share.
In a recent note, Kallo noted that consensus expectations “have overshot to the negative,” creating a favorable setup for Tesla for the remainder of 2019. The Baird analyst argued that several catalysts are currently present that could drive Tesla higher, starting with the company’s release of its Q2 delivery figures. Kallo also noticed that “bear arguments have preemptively shifted from demand to profitability,” and that a solid second quarter delivery result could set up a positive cash flow quarter, which could then result in TSLA shares rising in the second half of 2019.
Apart from the Baird analyst, Philippe Houchois and Himanshu Agarwal of Jefferies stated that despite being humbled by Tesla’s results in the first quarter, they remain “convinced that there is significant value” in the company. The analysts cut their full-year gross profit estimates by 20%, though they also argued that the negativity surrounding the electric car maker today is excessive, particularly with regards to Tesla’s alleged demand issues and the upcoming competition from other automakers.
The TSLA bulls’ recent arguments stand opposite those of Goldman Sachs analyst David Tamberrino’s points on Thursday. In his note, where he downgraded his TSLA price target from $200 to $158 per share, Tamberrino argued that the decline in Tesla shares would resume as it becomes evident that the demand for the company’s vehicles is “below expectations.” This is well in character for the analyst, who has long been one of TSLA stock’s most aggressive critics.
Last April, for example, Tesla was undergoing a company-wide initiative to hit a then-ambitious production rate of 5,000 Model 3 per week. Tamberrino then published a note, stating that Tesla would only be able to maintain a Model 3 production rate equal to around 1,400 units per week for Q2 2018. Similar to his downgrade yesterday, the Goldman analyst also adjusted his TSLA price target, bringing his estimates down from $205 to $195 per share. Tamberrino would ultimately be proven wrong at the end of the second quarter, as Tesla did produce 5,000 Model 3 in one week during the last week of June 2018.
Quite interesting is that Tamberrino’s perennial bearish Tesla calls from Goldman Sachs’ equity research division have remained consistent despite the increasing TSLA holdings of Goldman Sachs’ investment bank. When the analyst gave his 1,400-per-week Model 3 production estimate last year, for example, Goldman’s investment bank held over $330 million worth of TSLA shares. In Q1 2019, which appears to be considered by Tamberrino as a sign of Tesla’s predestined demise due to its lower-than-expected delivery and production numbers, Goldman’s investment bank increased its TSLA position by 35%.
Elon Musk, for his part, has noted that Tesla could be poised for a record quarter, one that even exceeds Q4 2018, a period where the electric car maker delivered over 90,000 vehicles to customers. Tesla is currently in full throttle as the final days of the second quarter count down, and based on recent reports, it appears that the Silicon Valley-based electric car maker is digging deep to hit its self-imposed targets.
As of writing, Tesla stock is trading +0.69% at $222.14 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI
Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
SpaceX officially acquires xAI, merging rockets with AI expertise
Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
Investor's Corner
Tesla (TSLA) Q4 and FY 2025 earnings call: The most important points
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Tesla’s (NASDAQ:TSLA) Q4 and FY 2025 earnings call highlighted improving margins, record energy performance, expanding autonomy efforts, and a sharp acceleration in AI and robotics investments.
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Key takeaways
Tesla reported sequential improvement in automotive gross margins excluding regulatory credits, rising from 15.4% to 17.9%, supported by favorable regional mix effects despite a 16% decline in deliveries. Total gross margin exceeded 20.1%, the highest level in more than two years, even with lower fixed-cost absorption and tariff impacts.
The energy business delivered standout results, with revenue reaching nearly $12.8 billion, up 26.6% year over year. Energy gross profit hit a new quarterly record, driven by strong global demand and high deployments of MegaPack and Powerwall across all regions, as noted in a report from The Motley Fool.
Tesla also stated that paid Full Self-Driving customers have climbed to nearly 1.1 million worldwide, with about 70% having purchased FSD outright. The company has now fully transitioned FSD to a subscription-based sales model, which should create a short-term margin headwind for automotive results.
Free cash flow totaled $1.4 billion for the quarter. Operating expenses rose by $500 million sequentially as well.
Production shifts, robotics, and AI investment
Musk further confirmed that Model S and Model X production is expected to wind down next quarter, and plans are underway to convert Fremont’s S/X line into an Optimus robot factory with a capacity of one million units.
Tesla’s Robotaxi fleet has surpassed 500 vehicles, operating across the Bay Area and Austin, with Musk noting a rapid monthly expansion pace. He also reiterated that CyberCab production is expected to begin in April, following a slow initial S-curve ramp before scaling beyond other vehicle programs.
Looking ahead, Tesla expects its capital expenditures to exceed $20 billion next year, thanks to the company’s operations across its six factories, the expansion of its fleet expansion, and the ramp of its AI compute. Additional investments in AI chips, compute infrastructure, and future in-house semiconductor manufacturing were discussed but are not included in the company’s current CapEx guidance.
More importantly, Tesla ended the year with a larger backlog than in recent years. This is supported by record deliveries in smaller international markets and stronger demand across APAC and EMEA. Energy backlog remains strong globally as well, though Tesla cautioned that margin pressure could emerge from competition, policy uncertainty, and tariffs.
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