Connect with us

Investor's Corner

Tesla (TSLA) could be in striking distance of a short squeeze soon: Piper Jaffray

Published

on

Back in the second quarter, Elon Musk predicted that the “short burn of the century” was coming soon. During that time, Tesla was racing to hit a Model 3 production rate of 5,000 units per week. The electric car maker did reach its Q2 production goals for the Model 3 then, though Elon Musk’s prediction did not come to pass.

If a recent statement from Wall Street is any indication, Tesla might actually be closing in on what could be a very notable and very realistic short squeeze.

In an appearance at CNBC’s Trading Nation, Craig Johnson, chief market technician at Piper Jaffray, stated that Tesla’s outperformance has made life quite difficult for the company’s short-sellers. This has been particularly notable recently, as Tesla shares (NASDAQ:TSLA) soared higher even as the market mostly spiraled down. In the past three months alone, TSLA has gone up 37%, while the Nasdaq plunged 8%.

Such strength, according to Johnson, has been making short-sellers quite nervous. During his recent CNBC appearance, the Piper Jaffray chief market technician stated that Tesla’s short interest ratio has been falling since around April, when it peaked at 31% of the company’s float. Johnson noted that if Tesla breaks through a key level of resistance, the company could realistically be within striking distance of a massive short covering.

“If we get a close above this $390 level, it’s going to suggest a topside breakout with a measured price objective based on the charts perhaps about $525 to $550. The shorts are going to be covering quickly and providing even a further squeeze higher from here,” the chief market technician said.

For such a squeeze to happen, though, Tesla would have to break the high of $389.61 it achieved in September 2017. A move to $525 represents a 46% upside from TSLA stock’s current price of around $360 per share as well.

Advertisement
-

Tesla is positioned pretty well this fourth quarter to deliver a big blow to short-sellers. The company’s fundamentals, after all, have been showing signs of strength since the end of the third quarter, when Tesla surprised Wall Street by posting $6.8 billion in revenue. This fourth quarter, Tesla seems poised to produce and deliver another record number of electric cars, thanks to the introduction of the Mid Range Model 3 last October. The phase-out period of the $7,500 federal tax credit in the United States is also expected to push the company’s numbers for Q4 even further.

Tesla’s Fremont factory and Gigafactory 1 in Nevada seem to be operating optimally as well. Elon Musk has noted that Tesla is now at a point where producing 5,000 Model 3 per week is no big deal, and the pieces are being put in place for a ramp towards even higher production numbers. The Model 3’s most disruptive variant, the $35,000 Standard Range RWD version, is getting closer to production. Overseas, progress for the construction of Gigafactory 3 in Shanghai is also moving at an extremely rapid pace.

Tesla had the cards stacked against it for the most part of the year, but the company has powered through. With possibly even better fundamentals this fourth quarter, Elon Musk’s predicted “short burn of the century” might finally be coming — and just as it is with many things Tesla, it could just be happening in Elon Time.

As of writing, Tesla stock is trading +0.77% at $360.73.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Advertisement
-

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

Advertisement
Comments

Elon Musk

Elon Musk calls Earth’s data centers “peanuts” next to what SpaceX is planning in orbit

Elon Musk says SpaceX capex efficiency is underestimated as orbital data centers loom by 2028.

Published

on

By

Elon Musk is pushing back on one of the biggest worries hanging over SpaceX stock. In a reply on X on Sunday, Musk said the company’s capital expenditure efficiency is severely underestimated. He was responding to a Milk Road Stocks post citing analyst Kyle Reidhead, who estimates SpaceX will need to spend roughly $470 billion over the next five quarters.

Reidhead built that figure around the target SpaceX set on its third quarter earnings call: 13 gigawatts or more of compute by the end of 2027. In his breakdown, Nvidia captures 83 to 89 percent of the spending. SpaceX ended the quarter with 1.7 GW of nameplate compute and guided to $35 billion to $40 billion in fourth quarter capex, as Teslarati reported.

Musk did not attach a number to his claim, but the earnings call shows the argument. CFO Bret Johnsen said new compute currently pays for itself in under a year at today’s pricing, and Musk said that window could shrink to six months next year. Using that pace, Reidhead argues about $230 billion of the $470 billion could come from operating cash flow and about $60 billion from SpaceX’s roughly $90 billion cash pile, leaving around $180 billion to borrow. Musk confirmed last week that SpaceX had already closed a new $40 billion debt raise to buy GPUs.

The ground buildout is not the end goal. It is what is meant to pay for the move to orbit. Replying on Friday to charts built from Sequoia partner Shaun Maguire’s SpaceX model, Musk wrote that “Terrestrial compute will be peanuts compared to orbital compute,” adding that orbital compute deployed per month “probably exceeds terrestrial around the end of 2028 and then far exceeds it in 2029.”

Maguire’s model shows how steep that path is. It has capex climbing from $88 billion this year to $290 billion in 2027 and $369 billion in 2028, with SpaceX burning $77.8 billion in cash this year and $122.6 billion next year before turning $114.9 billion cash positive in 2028. Musk’s response to the model was, “I think we can do better.”

Advertisement
-

The orbital half runs through Starmind. SpaceX plans to operate up to 1 million AI satellites flying in clusters of about 10, linked by roughly 10 terabits of bandwidth, with deployment of thousands of units starting as soon as late 2027 out of its Gigasat factory in Bastrop, Texas, according to SpaceX’s space safety page. Musk has said each Starmind spacecraft will carry more than 250 kW of solar power.

Getting there depends on launch volume. Maguire’s model assumes 250 Starship flights in 2028, up from two this year and 38 next year. The nearer test is financial: SpaceX guided to $33 billion to $37 billion in first quarter 2027 revenue, more than double the $14.58 billion it booked in Q3, and Musk reposted that guidance again on Sunday morning.

Continue Reading

Elon Musk

SpaceX President to gift Trump Accounts her SpaceX stock

Gwynne Shotwell’s 2 million SpaceX shares are headed to children’s Trump Accounts starting this December.

Published

on

By

Concept rendering of SpaceX President Gwynne Shotwell overlooks the company’s Hawthorne, California headquarters as an American flag flies over the campus at sunset.

SpaceX President Gwynne Shotwell said Friday that more than 2 million SpaceX shares belonging to her and her husband, Robert, will be distributed to children’s Trump Accounts in December, turning a pledge she made over the summer into an actual transfer. “Robert and I are thrilled that our gift of over 2 million shares of SpaceX stock will be distributed to children’s Trump accounts in December!” Shotwell wrote on X, adding that the shares are “transferring to escrow as we speak.”

The first round goes to children aged 11 to 17 who live in ZIP codes where the median family income is $57,000 or less, along with kids in ZIP codes with too few residents for the Census to report that figure. Shotwell said those families should receive a notice by Monday, Reuters reported.

A second gift is expected to be finalized in the next few weeks. That round will cover eligible children in military families serving overseas, children in foster care, and more kids in Texas counties near the Shotwells’ home where median family income is $90,000 or less. Elon Musk replied to the announcement with “Cool” and a heart emoji.

Shotwell first announced the donation on July 6, less than a month after SpaceX priced its record IPO at $135 per share on the Nasdaq. IPO filings showed Shotwell owned about 12.6 million SpaceX shares, Quartz reported at the time, which makes the gift roughly one sixth of her stake. At the roughly $146 per share used to value Musk’s own pledge earlier this month, 2 million shares are worth about $290 million.

How the stock would actually reach the accounts had been an open question since July. Treasury guidance acknowledged that stock donations could flow into Trump Accounts, but it did not explain the mechanics for a program whose contributions default into an S&P 500 index fund. Shotwell thanked the Treasury, the IRS, the Dell Foundation, Greater Horizons, Invest America and the law firms Morgan Lewis and Gibson Dunn for “working over the past few months to make this happen.”

The transfer also works as a dry run for a far larger gift. On October 19, Musk said he would give one of his SpaceX shares to every kid in America next year and called it “the first of many.” With roughly 72 million children in the country, that pledge is worth about $10.5 billion. President Donald Trump thanked Musk the same day and said the shares would go through Trump Accounts, though neither SpaceX nor the Treasury has published how or when that distribution will happen.

Shotwell’s recipients also fill a gap in the program itself. Trump Accounts launched on July 4, and the $1,000 Treasury deposit only goes to babies born between 2025 and 2028. Teenagers aged 11 to 17 receive no government seed money, so for many of the families getting a notice on Monday, SpaceX stock will be the first asset in the account. The accounts convert into retirement accounts when the child turns 18.

Continue Reading

Investor's Corner

Tesla has a Cybercab problem nobody saw coming

Tesla’s Cybercab line now builds robotaxis faster than Tesla can deploy them, Lars Moravy says.

Published

on

By

Tesla’s Cybercab line in Texas can now build the two seat robotaxi faster than the company can put it into service, according to Lars Moravy, Tesla’s Vice President of Vehicle Engineering. “We don’t run every day because the line can run so fast. It’s currently outpacing our deployments,” Moravy said in a new Cybercab deep dive from Munro Live. “So, it’s a bit of a race right now. Who’s going to go faster? Right now the manufacturing line’s ahead.”

Tesla’s official Robotaxi account shared a Cybercab analysis video on X on Monday, calling it a “Cybercab engineering deep dive.” Moravy’s comments go further than what he told analysts on the Q3 earnings call last week, when he said the Cybercab line’s listed capacity of more than 125,000 units a year undersells what it can actually run.

The tour shows where that speed comes from. Tesla’s unboxed process splits the Cybercab into front, rear, side and center modules that are built and tested on their own before they meet on a short final line. That final line has just 25 fully automated stations, which Tesla’s team estimated is a fifth to a tenth of what a Model Y needs. The full line is about 78% automated, the framing line is already at 100%, and the layout uses roughly 50% less floor space per vehicle. The stated goal is “100% automation in 10 second cycle time,” or one finished Cybercab every 10 seconds.

Tesla also deleted the paint shop. Only the side modules are coated, and the exterior panels get their color inside the molding machine. Engineers said the car is designed to run at least 500,000 miles, which matters for a vehicle that will spend most of its day carrying riders.

The battery got the same treatment. The Cybercab uses an 88S6P pack of 4680 cells in a steel enclosure, a first for Tesla, with each module potted separately so a single failed module can be swapped instead of the whole pack. Wireless battery management boards replace a wiring harness, and new contactors are fast enough to drop the pyro fuse entirely. Tesla’s battery director graded the pack an A minus, compared with a D for the Model Y structural pack and a B minus for Cybertruck. Up front, the drive unit runs an 11:1 gear ratio versus roughly 9:1 on most Teslas, since the Cybercab does not need a high top speed.

Advertisement
-

The deployment side is now the bottleneck Moravy described. Tesla had more than 50 Cybercabs working the Formula 1 weekend in Austin, and Texas records show 463 Cybercabs registered. Tesla said on its earnings call that Cybercab service will launch in Dallas next month, and Moravy said the company is aiming to get Cybercabs to customers by the end of 2026. Every unit built so far has gone into Tesla’s own fleet since the line moved into volume production in April.

Munro Live also asked when it could get a Cybercab to tear down. Tesla’s answer: “Not yet.”

Continue Reading