Investor's Corner
Tesla (TSLA) stock is starting to resemble Netflix before its massive rally in 2011
The past few months have challenging for Tesla (NASDAQ:TSLA) investors, but if recent signs are any indication, it appears that the electric car maker might show some recovery in the stock market soon. According to an advisory firm founder, Tesla stock has all but reached a point that is incredibly similar to that of Netflix back in 2011, right before it experienced an eight-year stretch of growth that propelled the company to its current place at the top of the on-demand streaming market.
Tesla currently trades at or near the $180 level, which corresponds to roughly half of the company’s peak of $385 last year. While this might feel alarming, it should be noted that Netflix’s investors experienced something far more harrowing back in 2011, when the company’s shares saw a full 80% stock decline. After a price increase and CEO Reed Hastings’ announcement that Netflix will be separating its streaming and DVD-by-mail business, the company saw a loss of 800,000 subscribers in a single quarter. That was a time when the company only had 24 million subscribers as well.
At the core of Netflix’s decision then was its sincere belief that online streaming services are the future of on-demand entertainment. They also believed in their pricing power. Eddie Yoon, a think tank and advisory firm founder, noted that Netflix’s high-stakes bets paid off. Since that 80% decline back in 2011, the company has increased its user base to 60 million in the US and 150 million worldwide. Netflix stock had also increased 39 times than its low point back in 2011.
Tesla is in a similar boat. Just like Netflix in 2011, the electric car maker is dealing with the fallout of a quarter that rendered lower-than-expected numbers, which, together with several factors, has caused the company to post a loss after two profitable quarters. Nevertheless, Tesla is making a big bet on its belief that the demand for electric vehicles will grow exponentially over the next few years. So far, the company seems to be right on the money in this sense, as EV sales across the globe are increasing. In 2018 alone, electric car sales accounted for 2% of total new vehicles sold in the US. A study by AAA also noted that 20% of Americans want to own an electric car.
Yoon notes that if there is anything that Tesla could learn from Netflix, it would be to improve its communication. During Netflix’s steep drop in 2011, the company performed subpar when it came to communicating with its user base. This was true during times when Netflix would change its pricing, or if it would change aspects of its business. Tesla is quite around the same boat. Its pricing power is strong, and contrary to Bernstein’s recent note, Tesla’s brand holds a lot of value for an increasing number of customers. Despite this, the electric car maker still has notable areas of improvement when it comes to communication, partly evidenced by the misinformation surrounding the company today. If Tesla can refine this, then the company’s potential recovery would likely be smoother than expected.
The recent comparisons of Tesla to Netflix in 2011 appear to have been triggered by rumors that an investor who took a particular interest in the streaming giant at its lowest point. These rumors were recently related by Will Meade, a former PM at Goldman Sachs and a former editor at Forbes. “Rumor swirling that a big activist has taken a stake in Tesla $TSLA and he/she said it reminds them of $NFLX in 2011. Explains the almost $3 million of $TSLA Aug $250 calls swept right at the open. Could it be Icahn!” he wrote, referring to billionaire investor Carl Celian Icahn.
As of writing, Tesla stock is trading at 5.20% at $188.42 per share.
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
Tesla stock (NASDAQ: TSLA) just got a price target boost from its biggest bear, Gordon Johnson of GLJ Research, who raised his expected trading level to one that is 95 percent lower than its current trading level.
Johnson pushed his Tesla price target from $19.05 to $25.28 on Wednesday, while maintaining the ‘Sell’ rating that has been present on the stock for a long time. GLJ has largely been recognized as the biggest skeptic of Elon Musk’s company, being particularly critical of the automotive side of things.
Tesla has routinely been called out by Johnson for negative delivery growth, what he calls “weakening demand,” and price cuts that have occurred in past years, all pointing to them as desperate measures to sell its cars.
Johnson has also said that Tesla is extremely overvalued and is too reliant on regulatory credits for profitability. Other analysts on the bullish side recognize Tesla as a company that is bigger than just its automotive side.
Many believe it is a leader in autonomous driving, like Dan Ives of Wedbush, who believes Tesla will have a widely successful 2026, especially if it can come through on its targets and schedules for Robotaxi and Cybercab.
Justifying the price target this week, Johnson said that the revised valuation is based on “reality rather than narrative.” Tesla has been noted by other analysts and financial experts as a stock that trades on narrative, something Johnson obviously disagrees with.
Dan Nathan, a notorious skeptic of the stock, turned bullish late last year, recognizing the company’s shares trade on “technicals and sentiment.” He said, “From a trading perspective, it looks very interesting.”
Tesla bear turns bullish for two reasons as stock continues boost
Johnson has remained very consistent with this sentiment regarding Tesla and his beliefs regarding its true valuation, and has never shied away from putting his true thoughts out there.
Tesla shares closed at $431.40 today, about 95 percent above where Johnson’s new price target lies.
Tesla (NASDAQ: TSLA) stock received a price target update from Pierre Ferragu of Wall Street firm New Street Research, citing the company’s growing lead in self-driving and autonomy.
On Tuesday, Ferragu bumped his price target from $520 to $600, stating that the consensus from the Consumer Electronics Show in Las Vegas was that Tesla’s lead in autonomy has been sustained, is growing, and sits at a multiple-year lead over its competitors.
CES 2026 validates Tesla’s FSD strategy, but there’s a big lag for rivals: analyst
“The signal from Vegas is loud and clear,” the analyst writes. “The industry isn’t catching up to Tesla; it is actively validating Tesla’s strategy…just with a 12-year lag.”
The note shows that the company’s prowess in vehicle autonomy is being solidified by lagging competitors that claim to have the best method. The only problem is that Tesla’s Vision-based approach, which it adopted back in 2022 with the Model 3 and Model Y initially, has been proven to be more effective than competitors’ approach, which utilizes other technology, such as LiDAR and sensors.
Currently, Tesla shares are sitting at around $433, as the company’s stock price closed at $432.96 on Tuesday afternoon.
Ferragu’s consensus on Tesla shares echoes that of other Wall Street analysts who are bullish on the company’s stock and position within the AI, autonomy, and robotics sector.
Dan Ives of Wedbush wrote in a note in mid-December that he anticipates Tesla having a massive 2026, and could reach a $3 trillion valuation this year, especially with the “AI chapter” taking hold of the narrative at the company.
Ives also said that the big step in the right direction for Tesla will be initiating production of the Cybercab, as well as expanding on the Robotaxi program through the next 12 months:
“…as full-scale volume production begins with the autonomous and robotics roadmap…The company has started to test the all-important Cybercab in Austin over the past few weeks, which is an incremental step towards launching in 2026 with important volume production of Cybercabs starting in April/May, which remains the golden goose in unlocking TSLA’s AI valuation.”
Tesla analyst breaks down delivery report: ‘A step in the right direction’
Tesla has transitioned from an automaker to a full-fledged AI company, and its Robotaxi and Cybercab programs, fueled by the Full Self-Driving suite, are leading the charge moving forward. In 2026, there are major goals the company has outlined. The first is removing Safety Drivers from vehicles in Austin, Texas, one of the areas where it operates a ride-hailing service within the U.S.
Ultimately, Tesla will aim to launch a Level 5 autonomy suite to the public in the coming years.
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