Investors had hoped that Tesla’s long-awaited robotaxi demonstration would deliver substance as well as style. On Thursday, Elon Musk showed off not just vehicles, but real vehicles and humanoid robots that will walk among guests. dancer Similar to the company’s “AI Day” three years ago, when he wore a robotic bodysuit, many analysts remained unimpressed. At a glitzy event at Warner Bros. Studios in Los Angeles, Mr. Musk made big promises but gave few details, emphasizing the case for Tesla bears as the stock price soared.
Rather than adding momentum to the stock’s recent rally, the robotaxi announcement is the “selling news” event some analysts were predicting as the stock plunged more than 7% on Friday morning. This has been proven. The stock is down about 11% since the beginning of the year, compared to a rise of more than 22% for the S&P 500 index. Tesla has already been ousted from the so-called Magnificent Seven by fast-growing semiconductor and software giant Broadcom.
Even well-known Tesla bulls like Wedbush Securities’ Dan Ives said Musk and Tesla didn’t provide enough detail about how the company would execute on its autonomous vision.
“This will inevitably weigh on stock prices this morning,” he and his colleagues said in a note. “That said, we strongly disagree with the idea that last night was disappointing, as we saw the CyberCab with our own eyes and argued the contrary after seeing a vast improvement in Optimus, with whom we interacted throughout the evening. Because I will.”
Musk has not given up on the idea that he is betting his company’s future on the realization of self-driving cars. He and other Tesla bulls agree that robotaxis could push the company’s valuation to $5 trillion, up from about $700 billion today.
Seth Goldstein, equity strategist at Morningstar, said Tesla is already a viable option thanks to the company’s vision to offer vehicles at a much cheaper price point that aren’t limited to geofenced areas. He said he was confident that the company could overtake companies like Alphabet Inc.’s Waymo, which is becoming increasingly regulated. Morningstar and the chairman of its electric vehicle committee recently spoke. luck.
Musk unveiled 20 vehicles on Thursday, saying Tesla’s CyberCab can be had for less than $30,000, while a Waymo costs about $250,000. Musk said the CyberCab would be completed in 2027 and acknowledged that he was “somewhat optimistic” about the timeline so far, but he did not say where the car would be built.
The company also surprised attendees by announcing the Robovan, which can carry up to 20 people, although the product’s production date and price were not mentioned.
“The CyberCab demo took place on a movie set in a well-controlled environment.
It was very similar to a slow, short amusement park ride,” Wells Fargo analysts who attended the event wrote in a note Friday morning. “Waymo currently hosts 100,000 rides a week in major cities, so we were even more excited about the TSLA demo.”
Tesla’s self-driving car strategy is based on further development of its “Full Self-Driving Software” (FSD), which still requires human supervision.
Musk said some Tesla electric cars should come with “unsupervised FSD” in Texas and California next year. However, many analysts stressed that there would be no short-term updates on the software’s progress or release of data to show improvements.
Wells Fargo acknowledged that the biggest plus was the Optimus robot that walked around the event and served drinks, but added that the economics surrounding the product remain unclear.
Any momentum Tesla stock had in the lead up to this event has now dissipated, and Tesla bears will continue to feel vindicated heading into the October 23 earnings call. The company’s stock price plummeted after Musk barely answered questions during an earnings conference in July. Profitability deteriorated, and he instead pondered the future of the company.
For Tesla executives, that makes sense, Goldstein explained.
“They tend to take a long-term view, so even if they have a few bad quarters, they don’t really care if stocks sell off,” he said.
Mr. Musk’s charisma and showmanship, along with compelling product announcements like Thursday’s event, have helped Tesla build a loyal fan base of shareholders. Their loyalty will continue to be tested, at least in the short term.
