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Tesla’s ‘extraordinary advantage’ influences $1,036 price target

(Photo: Claribelle Deveza)

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Tesla (NASDAQ: TSLA) has a new Street-high price target from Oppenheimer’s Colin Rusch, who marked the company’s “extraordinary advantage” in self-driving cars, cost reductions in manufacturing, and its valuation as a high-growth stock as reasons for the increase.

Rusch boosted his price target from $486 to $1,036 on Wednesday. The revised target has overtaken the previous Street-high price target of $950 from Wedbush analyst Dan Ives who revised his PT late last week.

Following Tesla for several years, Rusch is aware of the developments that the automaker has made in manufacturing and in autonomy over the past several years. “We believe investors are grappling with where shares go from here…and believe bulls are betting on Tesla leading commercialization of autonomous vehicles technology,” Rusch wrote to investors in a note.

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Autonomy has been a concern of Tesla’s for several months, offering its Full Self-Driving Beta to a small group of owners in October. Since then, that group has been sharing the developments and improvements that Tesla has made in its self-driving software through videos and other content sources. The improvements are notable, and Tesla’s self-driving suite is becoming more accurate and robust nearly every day. CEO Elon Musk expects a Level 5 autonomous vehicle to be released by Tesla by year-end, which would drive itself completely without any human intervention.

Tesla has several billion miles traveled on Autopilot throughout its fleet, giving the automaker an undeniable advantage over its competitors in experience. Google and Waymo are operating with about 50 million miles of experience, according to Cathie Wood of ARK Invest. This advantage “extraordinary” to Rusch, who said that thanks to the company’s over 1 million active vehicles, “shadow mode data collection can reach that threshold in ~six months, years faster than competitors.”

Tesla used an Apple tactic to leave them ‘way behind’ in self-driving: ARK Investment

On top of Tesla’s surge toward autonomous driving, its production processes are more refined and efficient. With two additional production facilities preparing to open later this year, Rusch sees Tesla’s production volume to be significantly larger than expected because of manufacturing efficiencies and techniques that the automaker is using.

“Given production expected to start in Berlin and Austin this year, we are watching timelines and Capex numbers closely given potential complications from COVID-19 slow down and unique process equipment, notably for larger molds and battery materials,” he said. However, Rusch recognizes Tesla could encounter challenges initially, especially as new equipment is shipped and installed during a pandemic. “We expect Tesla to ramp this equipment but would not be surprised by delays due to technological or logistical complexities.”

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At the time of writing, TSLA shares were trading at $840.78.

Disclosure: Joey Klender is a TSLA Shareholder.

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Investor's Corner

Tesla analyst’s firm has sold its entire TSLA position: Here’s why

Tesla analyst Gary Black revealed his firm, The Future Fund, has sold their entire $TSLA holding.

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tesla showroom
(Credit: Tesla)

Tesla analyst Gary Black of The Future Fund revealed today that his firm has sold its entire $TSLA holding, marking the first time since 2021 that it has not had a position in the company’s stock.

Black has been a skeptic of the company and relatively pessimistic regarding some things many investors would consider catalysts, outlining his concerns and reasoning for selling the shares.

Much of Black’s reasoning concerns Tesla’s price-to-earnings ratio, delivery results and potential delivery figures for the future, and other near-term projects that he does not believe will yield as much value as others perceive.

We will break down each concern of Black’s below:

‘Disconnected from Underlying Fundamentals’

Black says that The Future Fund sold its holdings at $358 per share. The firm’s current price target is at $310, and he says it will remain there based on “our forecast of 2030 Tesla volumes of 5.4m and 2030 Adj EPS of $12.

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Main Concern is P/E Ratio

The main concern Black and The Future Fund have is that TSLA “now sells at a 2025 P/E of 188x as earnings estimates continue to fall (-5% in the past week, -40% YTD) driven by weak YTD deliveries, including weak April results.”

Black says he believes quarterly deliveries will decline by 12 percent, and full-year by 10 percent.

This compares to Wall Street’s estimates of a 7 percent decrease for Q2 and a 5 percent year-over-year.

Robotaxi Skepticism

“We believe the risk/reward associated with the Austin robotaxi test remain asymmetrical to the downside,” Black writes in his post on X.

Tesla Robotaxi deemed a total failure by media — even though it hasn’t been released

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Many believe the Robotaxi platform could be Tesla’s biggest catalyst moving forward, especially as other automakers do not seem to have even close to as robust a solution to self-driving as Tesla.

Tesla’s Affordable Models

Black says there are concerns the affordable model will be “a stripped-down Model Y priced lower and funded by lower costs rather than a new form factory that expands TAM.”

This is confusing, especially considering the cheaper price tag would expand the total addressable market (TAM) to begin with. The Model Y has been the best-selling vehicle in the world for the past two years.

Tesla still on track to release more affordable models in 1H25

Introducing an even lower-cost model with some missing features would still likely be a significantly more attractive option than a base model ICE vehicle, especially because the value Full Self-Driving provides would make the car more beneficial.

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“This increases odds that FY’25 estimates decline further, risking a repeat of 2023-2024, when TSLA reduced EV prices supported by lower costs, and TSLA saw little or no incremental volume growth,” he finishes with.

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Tesla set for ‘golden age of autonomous’ as Robotaxi nears, ‘dark chapter’ ends: Wedbush

Tesla is set to win big from the launch of the Robotaxi platform, Wedbush’s Dan Ives said.

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Tesla (NASDAQ: TSLA) is set to kick off its own “golden age of autonomous growth” as its Robotaxi platform nears launch and a “dark chapter” for the company has evidently come to a close, according to Wedbush analyst Dan Ives.

Ives has jostled his price target on Tesla shares a few times already this year, usually switching things up as the market sways and the company’s near-term outlook changes. His price target on Tesla has gone from $550 to $315 to $350 back to $500 this year, with the newest adjustment coming from a note released early on Friday.

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As CEO Elon Musk has essentially started to dwindle down his commitment to the Department of Government Efficiency (DOGE) altogether, Ives believes that Tesla’s “dark chapter” has come to a close:

“First lets address the elephant in the room…2025 started off as a dark chapter for Musk and Tesla as Elon’s role in the Trump Administration and DOGE created a life of its own which created brand damage and a black cloud over the story….but importantly those days are in the rear-view mirror as we are now seeing a recommitted Musk leading Tesla as CEO into this autonomous and robotics future ahead with his days in the White House now essentially over.”

Ives believes Tesla’s launch of Robotaxi should be the company’s way to unlock at least $1 trillion in value alone, especially as the Trump White House will fast-track the key initiatives the automaker needs to get things moving in the right direction:

“The $1 trillion of AI valuation will start to get unlocked in the Tesla story and we believe the march to a $2 trillion valuation for TSLA over the next 12 to 18 months has now begun in our view with FSD and autonomous penetration of Tesla’s installed base and the acceleration of Cybercab in the US representing the golden goose.”

There are some concerns moving forward, but none of which relate to the AI/autonomous play that Ives primarily focuses on within the Friday note. Instead, they are related to demand in both Europe and Asia, as Ives said, “there is still wood to chop to turn around Model Y growth” in both of those markets.

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Nevertheless, the big focus for Ives is evidently the launch of Robotaxi and the potential of the entire autonomous division that Tesla plans to offer as a ride-sharing service in the coming months. Ives also believes a 50 percent or more penetration of Full Self-Driving could totally transform the financial model and margins of Tesla moving ahead.

Aware of the setbacks Tesla could encounter, Ives still believes that Tesla will establish itself as “the true autonomous winner over” and that investors will recognize the AI vision the company has been so bullish on.

Ives pushed his price target to $500. Tesla shares are down just under 1% at the time of publication. They are trading at $337.88 at 11:45 on the East Coast.

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Investor's Corner

X clarifies xAI prediction market rumors, hints at future plans

Musk’s AI firm denied rumors of a Kalshi deal but left the door open. Prediction markets + AI could change how we forecast everything.

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Credit: xAI

X dismissed rumors of xAI entering prediction market partnerships. In a recent X post, Elon Musk’s company clarified that xAI had not yet entered formal partnerships in the prediction market.

However, xAI clarification hinted at future exploration in the prediction market, aligning with X’s goal to become an “everything app.” The speculation underscores AI’s potential to reshape predictive analytics.

“Recent speculation about xAI’s involvement in the prediction market space has been circulating. While we’re enthusiastic about the potential of this industry and engaged in various discussions, no formal partnerships have been confirmed to date. Stay tuned!” noted the X team.

X’s statement followed a Tuesday post by Kalshi, hinting at a collaboration with xAI, which was deleted hours later. Kalshi suggested that xAI could leverage AI to analyze X’s news and social media data, enhancing betting decisions on political and economic events.

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Bloomberg reported Kalshi aims to use xAI for tailored insights, enabling users to wager on outcomes like Federal Reserve rate changes or elections through derivative contracts.

“There’s deep alignment between prediction markets, social media, and AI. Prediction markets capture what people know — AI scales what people can know,” said Kalshi CEO Tarek Mansour. “This is just the beginning of a long collaboration to unlock the full potential of prediction markets.”

The prediction market industry fits X’s vision to evolve into a comprehensive platform, capitalizing on its trend and news leader role. While xAI’s denial quashes immediate partnership claims, its openness to discussions signals potential interest in prediction markets, where AI could amplify real-time insights.

xAI’s cautious stance reflects its focus on strategic AI development while navigating speculative buzz. As X pursues its “everything app” ambition, prediction markets could enhance its ecosystem, blending social media’s pulse with AI-driven analytics. With no partnerships confirmed, xAI’s future moves may yet redefine how users engage with event-based predictions, positioning it at the forefront of AI innovation.

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