Investor's Corner
Tesla gets its mojo back and Wedbush responds with price target move
Tesla stock (NASDAQ: TSLA) has evidently gotten its mojo back. At least, that’s what analysts from both Morgan Stanley and Wedbush are saying.
Over the past five days, Tesla shares have exploded over 26 percent, nearing what would be their highest price of the year if they are able to gain just two additional dollars of value.
The recovery is just what the bulls of Tesla were looking for. Now, Wedbush analyst Dan Ives is responding to the strong week, which was surged mostly by a delivery beat for Q2 and potentially by strong energy division figures, with a new price target for Tesla.
Mojo Back for Musk
Wedbush has raised its price target to $300 from $275, highlighting a “major turning point” in the Tesla bull case.
Tesla beat delivery expectations by nearly 6,000 units when it reported Q2 numbers yesterday, strongly led by the Model 3 and Model Y, just as anyone who has been following along for the last few years would expect.
Elon Musk’s custom Tesla-branded Nike shoes (Credit: DMCustomSneakers via Instagram)
Ives believes the Tesla stock explosion is catalyzed by that, but also by the fact that the company is “the most undervalued AI play in the market” as Robotaxi Day approaches:
“The key for Tesla’s stock is the Street recognizing that Tesla is the most undervalued AI play in the market in our view with a historical Robotaxi Day ahead for Musk and Tesla on August 8th that will lay the yellow brick road to FSD and an autonomous future.”
Ives has always been bullish on Tesla, but was more than willing to admit that a choppy start to 2024 was enough to have some investors concerned. Nevertheless, the long Tesla play could be the best strategy for investors as the company moves closer toward autonomy and solving its Full Self-Driving suite, which is the main driver behind more value for shares in the future.
Bull Case for Tesla to $400
Ives and Wedbush also upgraded their bull case for Tesla stock to $400.
This is primarily driven and completely reliant on Tesla solving autonomy and FSD as a whole, which could drive the company back to the elusive $1 trillion valuation, a club that the automaker was once apart of:
“We believe in a bull case scenario the Tesla FSD piece/segment could be worth $1 trillion alone. We continue to believe that Tesla is more of an AI and robotics play than a traditional car company…..now the rubber meets the road as the Street anticipates August 8th as a key linchpin day for the Tesla story.”
Ives reiterated in this note, as he did with the first note on Tuesday that he and Wedbush believe the worst is in the rear view mirror as Tesla continues on in 2024. With Musk’s pay package dilemma out of the way and the company at least seeing some growth from Q1, investors have fewer concerns than before.
Of course, there is still the overhang of year-over-year delivery reductions, but Tesla is basically debunking that theory with its “between two waves of growth” narrative. Warning investors of this earlier this year was a good play for the company, but it will need to execute with its next-gen platform and Robotaxi over the next few years to keep concerns to a minimum.
Wedbush maintained an ‘Outperform’ rating, and sent its price target to $300 from $275.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
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