We have seen how $Tesla Motors(TSLA)$ stock price managed to surge despite a not so impressive earnings result. So this is also one of the learnings we can actually take note, there are other factors like investors confidence and their belief in technology.
This seem to be the case for Tesla, they are always innovating, but while market is concerned about the numbers and money, we need to be able to see the long-term value of the technology that Tesla bring.
Ark Invest Cathie Wood Long Term Conviction On Tesla
On Sunday, when Tesla CEO Musk posted on X that Tesla is planning to spend around $10 billion in 2024 in “combined training and inference AI, for AI focus primarily in car.”
There is one important statement that I personally feel is Musk comment that “Any company not spending at this level, and doing so efficiently cannot compete”. This is especially true if we looked at the AI investment, how many of them are close to AI monetization?
Musk also endorsed over the weekend comments by Cathie Wood via X, stating that Tesla is the "biggest AI project on Earth." Wood responded to Musk Sunday, writing that she and her Ark Invest funds view that Tesla's AI investments are "separating it from the auto and tech packs."
In this article, I would like to take a look at how Wall Street analysts are predicting Tesla target price and how the technical analysis is showing us.
Wall Street Analysts Price Target
According to Wall Street analysts, the average 1-year price target for TSLA is 190.03 USD with a low forecast of 23.09 USD and a high forecast of 336 USD. Wall Street analysts forecast TSLA stock price to drop over the next 12 months.
If we looked at the range, it is very wide, and we need to consider carefully on how Tesla stock price have moved recently, is it due to its earnings or financial standings? I am afraid the answer is NO.
The long term bullish sentiment remain for Tesla for its long-term value of full self-driving and robotaxi technology. Look at Tesla tentative China approval for for introducing Full Self-Driving (FSD) in China, this is a key milestone, and this is further strengthen by partnering with tech giant $Baidu(BIDU)$ on maps and navigation.
The visit by Tesla CEO is a "watershed moment for the Tesla story." and a homerun, this bring us back to the expectation of rising above the $275 price target.
Evolution of Average Tesla Target Price
The team up with Baidu which will provide access to its mapping data and provide its lane-level navigation service for FSD, which is not capable of self-driving. But the show of fully focus by Musk on Tesla business would mean that the trust is there, now it will boil down to the delivery.
If we looked at how Tesla target price have moved in relations to the actual stock price, the moment that market or industry is expecting delivery of a technology promise.
If it is not given or surfaced on time, we could see Tesla stock price making a dive, so to better understand and formed a pattern, I think we need to follow Musk comments on when can we actually see the first updates on FSD after the tentative China approval.
Tesla Stock Back To Favorable Demand (Buying) Strength
In recent weeks, we are seeing Musk and Tesla stepping up rhetoric about full self-driving and AI. We saw the message in full display in last week Tesla quarterly result call.
Tesla free cash flow is a concern when the company announced that it went negative to the tune of $2.5 billion in Q1, as Tesla spent $1 billion on "AI infrastructure" with plans to unveil its robotaxi on 08 Aug. And Musk has also mentioned about $10 billion commitment.
So will we see another obstacle in their road to getting FSD into the market? Or are we going to see more funds being raised by Tesla. Looking at how the stocks have been trading, we can see that demand is coming back. This might be good news, as institutional traders might be loading at the current price.
So we might be looking at a possible target price of $200 to $220 if this trend continue till the end of May/June. The next thing that might help Tesla would be rate cut, this would mean Tesla can do borrowing to fund its project.
Summary
Tesla have show that market is not concerned about its negative free cash flow, they are more interested on the delivery of technology when they entered a new market. I think the main focus now is the FSD, and how the partnership can further speed up the FSD delivery as well.
I would be taking some positions in Tesla as I foresee the partnership with Baidu for the roads maps might really help Tesla’s FSD.
Appreciate if you could share your thoughts in the comment section whether you think Tesla would be able to deliver what it set out to do for FSD?
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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