Investor's Corner
TSLA’s resilience in the stock market is partly due to the ‘Tesla Killers” failure
To say that the last few months have been a roller coaster ride for Tesla is an understatement. Just a few months ago, Tesla stock (NASDAQ:TSLA) was closing in on trading below $250 per share, and it was being bashed by a continuous stream of criticism from Wall Street. One analyst even called Tesla “no longer investable” due to Elon Musk’s behavior on Twitter. Short-sellers bet on a dramatic drop, with one stating that it was apparent “Tesla is having difficulties paying their bills.”
And yet, no dramatic drop happened. The company surprised Wall Street by posting $6.8 billion in revenue in the third quarter instead, and the stock has been up since then. Today, TSLA is trading near the $370 level, close to the highs it achieved on the day Elon Musk posted his now-infamous “funding secured” tweet. After a year of volatility, Tesla stock is up nearly 18% as of Wednesday’s close. That’s quite notable, considering that the S&P 500 is down 1.4% this year so far.
Apart from the company’s improving fundamentals, a good part of the Tesla narrative today is the company’s lead in the electric car market. One of the most notable bear thesis against the company is the notion that once legacy automakers decide to dip their feet into the production of EVs, Tesla would be overwhelmed and outgunned. Several automakers did release their first premium all-electric cars this year. But instead of overwhelming Tesla with their expertise (hence the term “Tesla Killer”), legacy auto’s first EVs have fallen short of the standards set by the Silicon Valley-based electric car maker.
In a recent note, Oppenheimer analyst Colin Rusch admonished traditional carmakers and their electric creations, stating that they present what could be described as a “slow and disappointing” competition for Tesla. JMP Securities analyst Joseph Osha was a bit more direct than Rusch, remarking that “It is incredible to me, at the end of 2018, that the major automakers still haven’t figured out how to respond competitively to Tesla.”
Tesla’s vehicles compete on the luxury segment, where brands such as Mercedes-Benz, BMW, and Audi are reigning. This year, three notable premium electric cars emerged by legacy carmakers — the Mercedes-Benz EQC, the Audi e-tron, and the Jaguar I-PACE — and while each is an admirable vehicle on their own, the EVs themselves include flaws that make them inferior to Tesla. Both the EQC and the e-tron incited questions about their real range when the vehicles were unveiled, and the Jaguar I-PACE, despite being well-received by critics, is far less efficient than an older Tesla Model X.
Tesla’s lead in the electric car segment was even acknowledged by UBS, which has a history of taking a bearish stance on the electric car maker. Following a teardown of the vehicle and a comparison between the Model 3 and competitors like the BMW i3 and the Chevy Bolt, UBS concluded that instead of being the underdog in the EV market, “Tesla has won the race and leads the championship,” thanks to its superior battery, powertrain, and overall tech.
As Tesla approaches the end of what could be yet another impressive quarter, the company continues to garner votes of confidence from Wall Street. Just recently, Baird analyst Ben Kallo reiterated his “Outperform” rating on TSLA stock while raising his price target from $411 to $465. Kallo cited the strengthening narrative surrounding the company, which changed from negative to positive in recent months.
“We believe the narrative will continue to change from ‘TSLA will never make money’ to ‘TSLA can be sustainably profitable,’” Kallo wrote in a note Thursday. “The narrative on TSLA, particularly in the middle of 2018, was as negative as we have experienced in our coverage, but we believe sentiment will continue to improve as the company proves it can be self-supportive, which should drive sustained share appreciation,” Kallo wrote.
With competitors only highlighting Tesla’s lead in the EV market, the potential of Tesla in the global stage remains vast. The Model 3 alone, which continues to sell well despite the US’ preference for pickup trucks and SUVs, is expected to be popular in Europe, whose sedan market is notably larger than that of America. With these factors in play, as well as the absence of notable competition from fellow luxury carmakers in the near future, the next year could prove to be one impressive ride for Tesla.
As of writing, Tesla is trading +1.20% at $371.01 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
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