Tesla (NASDAQ:TSLA | TSLA Price Prediction) is a name that you’re either pound-the-table bullish on or avoid-at-all-costs bearish. Indeed, there is a good mix of major bulls on Wall Street, but, at the same time, there are more than a fair share of skeptics as well, with price targets that entail downside and recommendations that may jump back and forth between underweight (or the equivalent of a sell) and equal-weight (pretty much a hold).
With Tesla delivering investors and analysts with another huge surprise on Tuesday, pulling the curtain on its much-anticipated more-affordable versions of the Model Y and Model 3 electric vehicles (EVs), there’s another reason for everyone to head right back to the drawing board. Indeed, Tesla sales have been under a bit of pressure in recent quarters.
But the road bump, which seems due to rising competition, seems more than worth riding out if you’re in the belief that Tesla is an AI company that’s about to break into new markets.
Tesla might be a must-own for investors looking to play a robotaxi boom
Indeed, a tough quarter or two of EV sales may not be significant if Tesla ultimately captures a big chunk of the robotaxi market. And while Google’s Waymo seems to be the top name to beat in the nascent world of self-driving vehicles, I do think that Tesla’s unique take on self-driving tech might just prove the one to beat over the longer term.
As Elon Musk once put it, “Lidar is lame.”
Indeed, if Tesla can pull off self-driving, that’s just as good without the need for a handful of lidar and radar sensors; perhaps the EV pioneer might offer the more economical solution as Elon Musk and company punch their ticket to the red-hot robotaxi race. Of course, time will tell if lidar and radar are really 100% necessary, or if all it takes is a powerful AI to get the job done well.
As always, we’ll all just have to wait and see. It’s really hard to tell how the robotaxi race will unfold over the coming years. And unless you know with a high degree of certainty which hardware stack will win out over the long run, I think it’s wise to spread one’s bets by owning a bit of Tesla if you’re already in Alphabet (NASDAQ:GOOG) for the Waymo robotaxi exposure.
In any case, Elon, who also runs the show at Grok maker xAI, is a visionary who’s also punched his ticket to the front row of the AI race. As such, I wouldn’t underestimate the man’s abilities as his EV firm capitalizes on one of the biggest opportunities in the firm’s existence.
Could Tesla’s FSD really be a game-changer?
Recently, Morgan Stanley analyst Adam Jonas (their price target on TSLA is a much milder $410) cited Tesla’s Full Self-Driving suite as a “game changer.” Indeed, there are some powerful AI features underneath the hood of the latest v14. As Tesla continues its expansion, it will be interesting to see how competitive dynamics play out. Either way, no lidar or radar may not be able to hold Tesla’s FSD back. As its robotaxi gets more experience on the roads, Tesla’s FSD only stands to get better.
With such a strong presence in robotaxis and a very intriguing Optimus robot that could also help Tesla grow into new markets with AI as its number-one advantage, perhaps the Street-high target of $600 on shares isn’t so hefty. Wedbush Securities’ Dan Ives holds the target, and he’s been one of the biggest bulls not only on Tesla, but most of the tech names leading the AI revolution.
A path to $600 looks set
Ives thinks the road ahead could be less bumpy, and the cheaper Model Y and Model 3, I think, could play a pivotal role in reinvigorating EV sales. All the while, it’s full speed ahead on the other AI efforts. All considered, I think $600 per share isn’t just realistic, but a bit conservative, especially if Tesla’s take on robotaxis ends up winning out.
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