Investor's Corner
Tesla (TSLA) share price ‘far from an aberration’ based on 2020 developments
Tesla (NASDAQ: TSLA) has gained significant notoriety on Wall Street after an extremely successful year in terms of trading. After a 400% spike in TSLA’s trading price so far in 2020, some refer to the stock as an aberration or an outlier that will soon realize its true valuation when other car companies catch up. However, one of Tesla’s biggest investors, investment firm Baillie Gifford, is arguing the other way, stating that its developments in 2020 speak for themselves.
“Whilst the company and its colorful founder attract an unusually high degree of attention, emotion, and noise, the underlying return picture is far from an aberration. Returns are concentrated in a handful of big winners,” the firm’s managers said in a report on November 6th. “Tesla has made significant operational progress. It has successfully added capacity, and the production ramp of its latest model has progressed far more smoothly than for any of its previous vehicles. Demand for its products is strong, and the response from its traditional competitors remains muted,” it added, according to The Guardian.
Gifford is spot on with its assessment of Tesla. The year 2020 has been tough, but the Silicon Valley-based electric car maker has accelerated toward its product’s global dominance through brand loyalty and innovation. The proof of growth is shown in the company’s Quarterly Earnings Calls, with its most recent numbers describing increased demand and a need for more efficient manufacturing to keep up with orders. Tesla has been focused on increasing its manufacturing and production lines, looking for new facilities to lead the way with sources of innovation.
But Tesla “mania” hasn’t been friendly to all. The self-proclaimed and outspoken short-sellers admit that the EV revolution’s leader is harming their portfolios. Ask David Einhorn of Greenlight Capital Re, who said that his firm lost $22.8M during the first nine months of 2020.
Who Wears Short Shorts: David Einhorn’s Ghost Hunt for Tesla’s Weakness
Short-sellers are right when they say that Tesla has been an outlier, but not in a way that will benefit their portfolios. The electric automaker has realized significant growth financially and in terms of production and delivery rates during a time where other companies in the same industry have fought to remain relevant. Tesla is undoubtedly the leader in electric transportation, and other car companies have been vocal about the company’s lead in the sector. Volkswagen and Audi are two companies that have admitted Tesla is years ahead of the competition.
Baillie Gifford is the second-biggest winner from Tesla’s share price increases in 2020. The only entity that has won bigger: Tesla’s CEO Elon Musk.
The firm holds about £16.7B, or $21.96B, in Tesla shares. This figure would be larger if the firm weren’t forced to sell some of its TSLA holdings earlier this year when the concentration of its portfolio had overflown with the electric automaker’s value. To keep its portfolio balanced for investors, the firm sold some TSLA shares.
Tesla’s dominance of the EV sector certainly has made some rich, and Gifford is one of them. The firm’s loyalty to the Tesla mission has made its portfolio extremely valuable in a matter of nine months, and it believes that the company’s plans will only further solidify the presence of its electric car revolution.
Disclaimer: Joey Klender is a TSLA Shareholder.
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.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Tesla has passed a critical self-driving milestone Elon Musk listed in Master Plan Part Deux
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