Proactive Investors - Tesla Inc (NASDAQ:TSLA) is an "undervalued AI play" with the EV maker's upcoming Robotaxi Day on August 8th expected to be a near-term catalyst for the company as CEO Elon Musk outlines the company’s full self driving (FSD) and autonomous future, analysts at Wedbush believe.
“We continue to believe that Tesla is more of an AI and robotics play than a traditional car company.....now the rubber meets the road as the Street anticipates August 8th as a key linchpin day for the Tesla story,” they wrote in a note to clients.
The analysts believe the in a bull case scenario Tesla’s FSD segment could be worth $1 trillion alone.
They see Tesla’s FSD and autonomous vision at an inflection point with its latest FSD v12.4 and FSD testing in China underway.
“As part of Tesla’s long driven full self-drive thesis and the company’s first mentions of robotaxis in 2019, it is now official that robotaxi will become a part of the Tesla portfolio as Musk and Tesla get ready for the first Tesla robotaxi to be unveiled on August 8th,” they wrote.
“Musk has said in the past that Tesla will make a car without controls for human use, saying in the past that FSD will reach a point of full autonomous use for taxi and driverless scenarios.”
The analysts see the EV demand story returning to Tesla, stating: “in a nutshell, the worst is in the rear-view mirror.”
They believe the company will achieve its aim of 2 million units per year in the coming quarters with clear momentum and easier comparisons for 2025.
“This good 2Q delivery performance seen earlier this week is just the appetizer to the main event in our view which is RoboTaxi Day on August 8th to unleash the next part of the Tesla autonomous story with all the Street watching this sum of the parts valuation (storage, FSD, software, auto, etc) now set to play out over the coming years,” they wrote.
“Very importantly it appears China saw a ‘mini rebound’ in the June quarter in our analysis with momentum into 2H along with pricing stabilization that helped Tesla battle through headwinds to deliver a much stronger delivery quarter.”
The analysts have a $300 price target and an ‘Outperform’ rating on Tesla, which traded hands just shy of $250 on Friday morning.