To The Moon

$Tesla Motors(TSLA)$ ’s highly anticipated Robotaxi event, “We, Robot,” is just around the corner, and analysts are weighing in on what it could mean for the company.

Stock Volatility and Recovery

Earlier this year, Tesla's stock plummeted nearly 43% in the first four months, wiping out over $320 billion in market value. However, thanks to improving quarterly delivery data and Musk’s confidence in the profit potential of autonomous driving, the stock has rebounded nearly 72% since hitting a low at the end of April.

RBC Capital Markets analyst Tom Narayan is cautiously optimistic about the upcoming launch. He believes the event will be crucial in assessing the viability of Musk’s claims regarding the Robotaxi’s potential. Tesla plans to introduce its first autonomous vehicle, the “Cybercab,” equipped with AI-trained cameras and self-driving software.

Narayan has raised his price target for Tesla’s stock by $12 to $236, forecasting that this new business could contribute $153 billion in revenue—about 63% of Tesla's current market value.

In contrast, CFRA analyst Garrett Nelson adopts a more cautious stance. He argues that Musk’s previous predictions about the market for Robotaxi were overly optimistic.

Nelson believes that true “driverless” taxis are still several years away and that Tesla has a long way to go before achieving Level 4 autonomy as defined by automotive engineering standards. His key concern is how investors will react: Will they get caught up in short-term issues or focus on long-term opportunities? Since late July, Nelson has maintained a “hold” rating on Tesla stock.

Market Challenges and Strategic Shifts

Tesla faces challenges, including falling electric vehicle prices, increasing competition in key Asian markets, and declining consumer demand, which threaten its profit margins. The company’s goal of delivering 50% annual growth now seems at risk. To reignite public interest and maintain investor confidence, Musk is pivoting Tesla’s focus from traditional car manufacturing to AI and autonomous technology.

Tesla plans to release its third-quarter earnings report on October 16. Analysts expect earnings per share to drop by 9% year-over-year to $0.60, with revenues around $25.57 billion. As of Tuesday's close, Tesla’s stock rose by 1.52% to $224.50, reflecting a 41.4% increase over the past six months.