Investor's Corner
Tesla (TSLA) bull projects massive growth in 2020 even with conservative estimates
This year has been one of Tesla’s most historic yet, with the company’s shares dropping to over two-year lows before recovering and reaching new all-time highs. As 2019 ends with Tesla showing its strength in terms of vehicle production and deliveries, an ardent TSLA bull has stated that the company is on the cusp of even more dramatic growth next year. What’s more, Tesla seems poised for this growth even with conservative estimates.
Forecasts from Tesla investor-enthusiast Galileo Russell of YouTube’s Hyperchange channel have always been on the more conservative side. For his 2020 financial projections, the investor adopted the same stance. Despite this, results from the Hyperchange host’s research points to Tesla potentially delivering around 600,000 electric cars in 2020, provided that Model Y production hits its stride at the latter half of the year. That’s around a quarter of a million more than the vehicles Tesla will likely deliver this year.
In a video outlining his thesis, Russell explained that Tesla is now at a point where its core business is seemingly headed towards more stable waters. Cash flow continues to show strength, and the company is sitting on $5 billion in cash. Demand for its vehicles like the Model 3 is validated by sales in the United States, Europe, and China as well, putting the “demand problem” short thesis to rest. Apart from this, Tesla has returned to profitability, and these sentiments are pretty much reflected in the company’s stock, which has broken the $400 per share barrier while hitting all-time-highs.
In a way, Tesla is in a great place to start producing a vehicle that has the potential to carry it higher: the Model Y. The Model Y is a crossover, which means that it is targeted towards one of the auto industry’s most lucrative segments. If the Model 3, a vehicle that competes in a segment that is showing a decline in several regions, can push Tesla so far up, one can only imagine what the Model Y can do to boost the electric car maker further. Tesla, after all, expects the Model Y to outsell the Model S, Model X, and Model 3 combined.
That being said, the TSLA investor expects Tesla Model Y production to be fairly gradual. Russell was optimistic in his projection that a few Model Y can enter production as early as Q1, but he remained conservative for the first half of the year. Overall, the Hyperchange host expects Model Y to hit its stride in the third quarter with a production of about 25,000 units. If Tesla accomplishes this, Russell noted that the crossover’s production could go as high as 75,000 in Q4. This is despite the investor’s prediction that Model S and X sales will drop to their lowest levels as buyers wait for the vehicles’ Plaid variants, and that the Model 3 will see some cannibalization from its crossover sibling.
It should be noted that Russell’s expectations don’t account for several factors that Tesla could still improve, including efficiencies in its vehicle production process and its gross margins. Considering these factors, Tesla may very well remain profitable while allowing the company to pursue other high-profile projects such as the establishment of the Megacharger Network for the Semi, or the buildout of massive projects such as Gigafactory 4 in Europe.
It should also be noted that the Hyperchange host’s models do not account for any additional revenue streams that Tesla can tap into, such as its batteries and powertrains that could be sold to OEMs for their own electric cars. Elon Musk has stated that he is open to such ideas, and Fiat-Chrysler, which already buys credits from Tesla, has expressed interest in tapping into the Silicon Valley-based company’s technology. Considering the lead that Tesla continues to establish in terms of range and efficiency, the idea of a veteran automaker utilizing the company’s batteries and powertrains is more than feasible.
Tesla stock has been on a massive rally lately, and as shares hit a record high, speculations were abounding that the rise was due to shorts covering, or sentiments improving from investors. Russell argues that the recent stock movement for TSLA is also driven, if not primarily, by the steady improvement in Tesla’s fundamentals. Little by little, Tesla is becoming more and more like a full-fledged business, and as it rakes in the profits amidst its growth, the company may very well be headed towards even more milestones in the near future.
Watch the Hyperchange host’s full forecasts for Tesla in 2020 in the video below.
-
Elon Musk
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Elon Musk told SpaceX staff AI revenue will soon dwarf rockets and Starlink combined entirely.
Elon Musk told SpaceX employees this week that artificial intelligence, not rockets, will soon carry the company’s revenue. In a roughly 29 minute internal address posted on SpaceX’s X account on Tuesday, Musk said AI revenue will pass every other line of business at SpaceX “probably in September” and pull further ahead by the fourth quarter.
The numbers he gave are specific. SpaceX currently runs 1.4 gigawatts of AI compute capacity. Musk wants that at 10 gigawatts by the end of 2027, a jump he tied directly to revenue: “if we bring 10GW of AI online by the end of next year, it will be $300 billion to $500 billion a year in revenue.” He called those “big numbers,” which undersells a projection larger than what most countries produce in a year.
We made rockets reusable and are rebuilding the internet in space. The next challenge: making life multiplanetary and understanding the true nature of the universe
Watch @ElonMusk deliver a company update to @SpaceX employees pic.twitter.com/5c8rxoCQfu
— SpaceX (@SpaceX) August 11, 2026
Musk went further on where AI fits into SpaceX’s future. “Probably in four or five years, AI will be 99% of the value of SpaceX,” he told staff, adding that digital intelligence would eventually run “a trillion times” ahead of biological intelligence as computing scales. He tied that growth to the company’s founding mission, telling employees “we must win on AI, because the future is overwhelmingly AI and robots,” with the payoff meant to help fund Starship and a Mars program that increasingly runs through Terafab, the joint Tesla, SpaceX and xAI chip plant.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
None of this is entirely new territory. SpaceX told investors much the same story during its first earnings call as a public company on August 4, where Musk moved the company’s $1 trillion revenue target up a year to 2030 and said Starlink could someday carry a majority of the world’s internet. What the all hands video adds is a hard deadline and a specific power figure Musk had not given publicly before, along with a franker pitch to his own workforce that AI, not launch cadence, is now the thing SpaceX is betting its future on.
The AI revenue itself is not coming from SpaceX training its own models. It is largely Starlink acting as the network layer for xAI’s workloads, plus SpaceX renting out compute capacity directly, the same approach behind the roughly $16 billion the company spent on AI infrastructure in a single quarter.
Musk closed the video with a pitch aimed at recruiting and retention rather than investors, telling employees that anyone who helps SpaceX win the AI race will eventually get the chance to go to the moon or Mars themselves. Whether SpaceX can turn 1.4 gigawatts into 10 in seventeen months is the more immediate question, and one that will show up in quarterly numbers well before anyone leaves Earth.
In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Tesla has one big financial question to answer for investors: Morgan Stanley
