A Tesla super charging station is seen in Arlington, Virginia
Andrew Caballero-Reynolds/AFP via Getty Images
The big surprise from Tesla at its AI day was a humanoid robot that might be tested out in 2022. Few saw that coming. The stock is rising despite the fact investors didn’t learn much—that they could understand—about the company’s base business.
Tesla stock is up 2% in premarket trading, while S&P 500 and Dow Jones Industrial Average futures are both down about 0.4%.
It’s a decent move, especially considering Friday’s market action—and how weird AI day was. The event began at about 8:45 p.m. EST and ran for a couple of hours. The presentation was technically dense and focused on how Tesla develops its autonomous driving functions. It looked impressive, but investors typically don’t think in terms of peta-FLOPS of computing power. There wasn’t a lot of new—or comprehensible—detail about vehicle safety or the company’s marketing practices about its Autopilot and Full Self Driving vehicle features, issues that had been front of mind for investors recently.
“The event helped showcase [Tesla’s] leadership in software and compute,” wrote Wells Fargo analyst Colin Langan in a Friday report. He noted the Tesla Bot too, adding that “2022 seems optimistic given the years of development for similar tech at Boston Dynamics.” Despite his doubts, Langan, who rates Tesla Hold and has a $660 price target for shares, expects the Bot to boost the stock.
Not everyone is so sure. Future Fund founder, and former Wall Street analyst, Gary Black wrote that, while the Bot might represent a new revenue stream at some point, it doesn’t accelerating the transition to sustainable energy. Black posts research to his 80,000-plus Twitter (TWTR) followers and owns Tesla stock. He says shares are worth $1,100.
Wedbush analyst Dan Ives, who rates Tesla shares Buy and has a $1,000 price target, found the Bot puzzling.
“Unfortunately, as we have seen with robotaxis and other future sci-fi projects for Musk we view this Tesla Bot as an absolute head scratcher that will further agitate investors at a time the Street is showing growing concern around rising EV competition and safety issues for Tesla,” wrote Ives.
One of those issues is a recently launched investigation by NHTSA. The agency is looking into 11 accidents involving Tesla’s autonomous driving features. That disclosure sent shares down 4.3% Monday. Still, Ives added that the event showcased the company’s leadership in full self-driving technology.
The event doesn’t seem like it will be a big catalyst, either way, for the stock. Analysts and investors will now look ahead to new capacity due to the start up of new factories in Texas and Germany around the end of 2021.
Write to [email protected]
