TMTPOST -- Tesla Inc. stocks rose as much as 4% at morning trade and eked out a nearly 0.2% gain on Monday. Shares closed at $389.79, hitting their highest close since January 3, 2022, and are now less than 5% off from their record close of $409.97 on November 4, 2021. shares of Tesla extended the rally after Bank of America (BofA) Securities analyst expressed their upbeat on robotics tech adopted by the U.S. electric vehicle (EV) giant.
Credit：Tesla
BofA analyst John Murphy felt confident on Tesla’s outlook in 2025 and the longer term following a Gigafactory Austin visit. “The trip gave us increased confidence that TSLA is well-positioned to grow in 2025+ with its core EV business and launch of its robotaxi offering, and longer-term from its investments in Optimus,” Murphy said in a note. The analyst noted Tesla is currently using Optimus to sort through its battery cells without any intervention, and has been testing the robotic humanoid’s dexterity via use cases such as catching tennis balls.
Murphy in the note reiterated his Buy rating for Tesla and lifted his price target to $400 to $350, an increase of 14.3%. The new target, one of the highest on Wall Street, suggested Tesla shares are expected to jump around 11.8% from last Wednesday close.
Tesla CEO Elon Musk called Optimus "the most advanced humanoid robot by a long shot" during Tesla's latest earnings call in October. He said Tesla was the "only company that really has all of the ingredients necessary to scale humanoid robots." "What other companies are missing is that they're missing the artificial intelligence (AI) brain, that they're missing people to really scale to very high-volume production," Musk said. "I think Optimus will ultimately be the most valuable part, so I think [it] has a good chance of being the most viable product that we made."
At the “We, Robot” eventin October in Los Angeles, Musk revealed Optimus would cost between $20,000 and $30,000, and would essentially operate as the perfect assistant for anyone who needed some help at home.
Tesla has said it plans to have 1,000 Optimus robots working at Austin factory by the end of 2025, while Murphy believes that robot training will accelerate, with “compute power” of Tesla’s supercomputers shifting to Optimus development as Tesla’s robotaxi tech matures. So far as Murphy concerned, Optimus is more of a “long-term potential” opportunity, with a capital raise through an equity offering a relatively painless way to expand compute capacity.
The visit to Tesla’s Austin factory made Murphy and other BofA analysts believe that the first big driver for the company is the prospect of an upcoming low-cost EV, namely, Model 2. Tesla hasn’t officially released specific details about Model 2. Musk hinted at Tesla's second quarter earnings call that a more affordable model will hit the market next year. “We won’t go much into the product roadmap here because that is reserved for product announcement events. But we are on track to deliver a more affordable model in the first half of the year,” Musk said.
Murphy believes the new vehicle will increase Tesla’s TAM (total addressable market), cost less than $30,000, and benefit from a lower cost due to factors like “de-contenting, making the motor more efficient and thereby enabling a smaller battery, and changing the interior,” among other factors. Murphy is confident the low-cost model won't be its only new model in 2025, per Tesla’s past statements.
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