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.
Investor's Corner
Tesla gets its latest short from Michael Burry: ‘Happy it jumped back to this level’
Tesla short seller Michael Burry, the subject of the film “The Big Short,” where he was portrayed by Steve Carell, has revealed he has opened a new bet against the stock.
In a new update to his Substack newsletter in a post titled “Trading Post June 30, 2026,” Burry revealed a new set of bets against Tesla, Caterpillar, NVIDIA, Applied Materials Inc., and the iShares Semiconductor ETF.
In regard to Tesla, Burry wrote:
“And finally I shorted Tesla at 416.22. Happy it jumped back to this level.”
This means Burry likely opened his new short position after the company’s recent rally on Wall Street, which saw Tesla shares sink in mid-May, only to recover to well over the $400 mark. Currently, shares trade at around $427.
The company saw a big Tuesday as shares climbed considerably, over 10 percent. The size of the Tesla short was not provided, nor did Burry give any information on the position’s structure, the number of shares, dollar value, or whether options were used in the short.
The Tesla and SpaceX merger everyone is talking about is quietly building
Over the years, Burry has been one of the more vocal critics of Tesla, calling its share price “media inflated,” and saying it was “ridiculously overvalued” as recently as December.
The company has largely transitioned away from being known as an automotive company and instead is much more widely regarded as an AI play, mostly due to its Full Self-Driving efforts, Optimus robot development, and data collection related to both.
This has not pulled those skeptics away from being vocal about their distaste for how Tesla is valued, but there’s no denying that the company is a global force in many things, including sustainable energy, automotive, and AI.
Wedbush Securities is initiating stock coverage on SpaceX (NASDAQ: SPCX), marking the first comments on the company since it went public several weeks ago. Wedbush and its analyst handling coverage, Dan Ives, are widely bullish on fellow Musk company Tesla (NASDAQ: TSLA).
Ives wrote his first note initiating coverage of SpaceX shares on Wednesday with a $190 price target and an ‘Outperform’ rating. The firm believes the company is well positioned off of its IPO because of its wide array of projects, including AI compute power and infrastructure, connectivity projects, and launches.
“We view SpaceX as one of the most differentiated assets within the tech market with a strong footprint across its three core markets, with Starlink driving success with connectivity,” Ives wrote, “Starship launches leading to a demand flywheel and increasing deal flow for its Colossus clusters.”
Elon Musk called it Epic: The full story of SpaceX’s Starship Flight 12
Wedbush leans heavily on Starlink, which they say is the “profitability driver given the strength of its recurring revenue base of ~12 million subscribers as of June 5th.” Ives believes Starlink is still in the “early innings” of penetrating the global telecommunications and broadband market, as it only holds less than a 1 percent share. However, this number is sure to increase over time.
It also highlights the importance of Starship, which it says is an “essential layer” of SpaceX’s overall success. SpaceX developing and displaying the ability to reuse rockets is a major cost and reliability advantage “as it reduces the necessary hardware launch costs while generating a feedback loop for future flights to improve their launch flight rate without accelerating capex spend.”
Finally, SpaceX’s recent AI/Compute projects are also very elementary, Ives writes. It is worth mentioning Wedbush said its $190 price target is derived from a valuation forecast that sees the company yielding roughly $2.48 trillion of implied enterprise value.
There are also some factors that Wedbush did not take into account with its initial coverage. The firm wrote in the note:
“We note that there is optional value coming from Starship’s accelerating scale towards sub-$200/kg unit economics, orbital data centers, and enterprise AI monetization as these factors could drive meaningful upside but these face major hurdles, so we do not take that into account with our valuation.”
SpaceX shares are down just over 2 percent today, trading at around $167 at the time of publication.
For years, there have been images and videos across social media platforms that have reminded me of when I was a 15-year-old kid teased by “Xbox 720” videos on YouTube. These videos are of the supposed “Tesla Phone” that Elon Musk was secretly developing in between leading Tesla with its electric cars and SpaceX with its reusable rockets.
Would you buy a Tesla phone ? pic.twitter.com/aaTwvvIJit
— Tesla Owners Silicon Valley (@teslaownersSV) October 6, 2023
Although Musk has put those rumors to bed several times, it was never completely out of the realm that he could get involved in cell phones in some capacity. Think outside the box and more macro-level, though. Instead of reinventing the computer, Musk reinvented connectivity by developing Starlink with SpaceX.
It could be something similar, TD Cowen analyst Gregory Williams said in a note last week, where he hinted SpaceX could be gathering some steam to acquire T-Mobile.
Williams said it would be the “clear choice” for SpaceX if it decided to go through with a network acquisition. He also suggested AT&T.
The move would be possible through selling more of its own stock, which would help SpaceX raise the money to purchase T-Mobile, which would cost roughly $300 billion. It could be one of the moves SpaceX makes post-IPO in terms of an acquisition: it already acquired Cursor AI for $60 billion.
Other analysts, like Dan Ives of Wedbush, believe SpaceX and Tesla will eventually merge into one anyway, and that conglomeration could come as soon as this year, some have said.
The implications of SpaceX purchasing T-Mobile are massive. A combined entity would create a truly ubiquitous network: T-Mobile’s terrestrial 5G towers and Starlink’s growing constellation of Direct-to-Cell satellites. This would essentially eliminate dead zones across the U.S. and potentially globally.
SpaceX would instantly become a full-scale facilities-based carrier with satellite differentiation; a huge advantage. This would pressure AT&T and Verizon heavily.
There are also concerns like a potential reduction in long-term competition, and of course, a deal of that size would face intense scrutiny from government agencies.
The strategic fit is compelling due to the existing Starlink–T-Mobile partnership and complementary technologies (space + terrestrial). It could create a dominant integrated communications player. However, the regulatory, financial, and execution hurdles are enormous — this remains highly speculative with no indication SpaceX is actively pursuing it right now.
Tesla Optimus project fires up as Musk sees production line progress
Tesla gets its latest short from Michael Burry: ‘Happy it jumped back to this level’
