Tesla (TSLA) stock rose nearly 5% on Monday as investors embraced CEO Elon Musk's latest declaration that Tesla will debut its long-awaited robotaxis on August 8th. The transaction was completed.
Musk's announcement about Tesla's robotaxis after the bell on Friday followed a Reuters report that Tesla had canceled plans to build its long-awaited sub-$30,000 electric vehicle, which some are calling the Model 2. It was something. Reuters said Tesla will instead focus on self-driving.Robotaxis, Musk responds on X Reuters said he was “lying (again)” and then returned to the stage to announce the announcement of a robotaxi, which is generally understood to have no steering wheel or pedals. Whether or not they will release a low-cost EV is still an open question.
Despite the stock's jump on Monday, Wall Street analysts are mixed on the announcement.
Deutsche Bank's Emmanuel Rosner said the robotaxi news “changes the theory” about Tesla.
“If a move away from Model 2 is confirmed again, the bull case for Tesla will probably be that Tesla focuses on robotaxis and leverages the benefits of its own AI and software, given the steady improvements in self-driving technology. It would mean that they decided to push it further.A small number of OEMs [original equipment makers] It could be imitated, and it would be economically advantageous to do so,” Rosner said in the bullish side of his paper.
But the downside is that Tesla has given up the “important reason” many people own the stock. That is, Model 2 is a “volume strategy that re-accelerates volume, margin, and FCF.'' [free cash flow]” Rosner said. It also means the bullish thesis is based on Tesla cracking the code on self-driving, but that requires overcoming many regulatory hurdles and obtaining enough data to train the software. there will be.
Rosner rates the stock a “buy” and has a price target of $189.
Meanwhile, Tasha Keeney, a prominent Tesla bull at ARK Invest, believes Tesla's long-term potential is largely tied to self-driving and self-driving.
“The company has an unparalleled data advantage compared to any other company that is developing solutions that enable complete autonomy,” Keeney said in an interview with Yahoo Finance Live. , said that as with AI, data is the key to training models and arriving at a working model of self. He said Tesla's Full Self-Driving (FSD) beta is just around the corner, noting that Tesla accumulates 2.5 million miles of self-driving data from customers every day. Keeney said this is the beginning of the project.
“We think this is going to add value to Tesla going forward. If you look five years from now, we think it's going to be two-thirds of the company's value in five years. So we're very excited about it. I’m excited,” Keeney said.
ARK Invest founder Cathie Wood recently reiterated her firm's Tesla price target at $2,000 and expects revenue from robotaxi efforts to be $10 trillion.
On the other side is Roth Capital's Craig Irwin, who is far more skeptical about robotaxis. He believes that today's stock price movements are technical in nature and not rooted in fundamentals. Mr. Irwin has a “neutral” rating on the stock and his price target is $85.
“Professional investors follow momentum. They measure retail momentum very carefully, and the magnitude of the rally from this announcement will be measured by all of my clients across Wall Street. '' Irwin said. After first understanding this news, Irwin believes that Tesla's autonomous strategy is still far away.
”[Autonomous driving] Consumes as much power as the drivetrain [in current EVs].Technically possible and possible, but not in reality [Tesla] It's a vehicle that's already on sale, and it's not in the format that everyone is using right now,” Irwin said.
Irwin believes Tesla vehicles will need better sensors, cameras and other equipment to become truly autonomous. The appeal of what Mr. Irwin calls “cyber taxis” masks larger fundamental problems at the company, such as a lack of vehicles. Demand and intense competition.
“I think the stock price could be cut in half. I think we'll continue to see lower prices. I think we're seeing more compression in margins, but that's a big deal given the fact that the company is currently shrinking. It’s about deflecting,” Irwin concluded.
Pras Subramanian is a reporter for Yahoo Finance.you can follow him twitter And even more Instagram.
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