Investor's Corner
Venture capitalist explains how Tesla critics missed the big picture on TSLA
On the heels of a profitable Q2 2020 earnings report, Tesla (NASDAQ:TSLA) bulls and bears remain locked in battle over the electric car maker’s second quarter results. Tesla bulls are celebrating the company’s first profitable year, while bears are pointing out that the electric car maker was only able to accomplish such a feat due to regulatory credits. For venture capitalist Chamath Palihapitiya, the TSLA bull vs bear debate has been an example of long term thinking against balance sheet mathematics.
Chamath, an early investor in Facebook who is estimated to be worth about $1.2 billion today, was recently featured in CNBC’s Squawk Box. During his segment, the venture capitalist explained that there is an emerging trend today among Wall Street analysts and retail investors, since the latter now have access to so much information. The result of this, according to Chamath, was that the quality of retail investors’ analysis has gotten a lot better, to the point where it could be on parity or even better than Wall Street’s.
“I think this is a really important example of much bigger trend that’s happening in the stock market, which is that retail investors now have access to so much information that it’s almost on parity with people that work in traditional investment organizations. And what we’ve seen as that happened, is that the quality of that analysis and the ability to see around the corner is as good and in many cases, better than traditional investment firms in the way they view the problem,” he said.
Responding to inquiries about Tesla bears’ arguments about the company’s regulatory credits, the venture capitalist explained that TSLA critics have so far been playing balance sheet mathematics. This, unfortunately, has led them towards massive losses, something that Tesla short sellers have suffered from in recent months. Apart from this, Chamath added that ultimately, it should be noted that the Tesla story is not only about cars anymore. He added that this will only get more prominent as the industry shifts further into electrification. In short, Tesla’s milestone in Q2 was not an ultimate victory for the company — it is only the beginning.
“So from Day 1, you’ve had this massive tension between the bulls and the bears on this company, and the bulls, basically saw a long term trend around electrification, and the bears tried to play with balance sheet mathematics. Of course, if I said ‘You can sell 90,000 cars, but then if you negative sell 100,000, then you’ve not sold 10,000.’ And you would say, ‘What does any of this mean?’ You can use any convoluted logic to try to be short this stock, and what you would have done is just lost an enormous amount of money.
“And so, what we’re gonna see now is that the stock will be part of the S&P 500. It is the leading edge when it comes to electrification and decarbonization, and here’s something, what the bulls would get right and what the bears will ignore from here is that this is no longer about cars. That that’s the first wave of growth, and I think people are pricing in an evisceration of traditional autos and an enormous shift to EVs, of which Tesla will get the disproportionate share,” he said.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
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.
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