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Wedbush Previews Tesla AI Day; Reiterates Outperform

Stock Markets Sep 29, 2022 11:48
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By Michael Elkins 

Shares of Tesla, Inc. (NASDAQ:TSLA) are down 4.82% in mid-day trading ahead of the company's AI day tomorrow. Wedbush reiterated an Outperform rating with a price target of $360. The much anticipated event is expected to feature several next-generation technologies, highlighting the R&D initiatives underway, including the company's humanoid robot along with further updates on FSD and Dojo.

The electric vehicle company is set to unveil a prototype of its humanoid robot, Optimus, which in theory will help users perform repetitive and dangerous tasks that will be able to drive down labor costs in the future. Tesla plans to deploy Optimus within its own gigafactories; however, the company could possibly sell its product to other manufacturers, creating another opportunity for Tesla.

CEO, Elon Musk, faced skepticism last year when the Optimus was first announced. The Street has been laser-focused on driving near-term battery technology enhancements, capacity build-outs, and fending off rising EV competition from all angles globally. Humanoid robots were not on the radar. This will be a key event for Musk to prove there is a strategic path on the Optimus front.

The Street will also be focused on the company's Full Self-Driving (FSD) technology. Tesla remains under major scrutiny for safety issues surrounding FSD. A US probe into the program is ramping up. The NHTSA opened a second defect probe in February, and earlier this month, a California man filed a proposed class action suit in San Francisco federal court, claiming the carmaker has "deceptively and misleadingly" marketed its driver assistance systems. FSD is a key part of the Tesla growth story over the next decade, and this is a pivotal event tomorrow for Musk to lay out technology enhancements and improvements over the next year.

Wedbush analysts wrote "The holy grail for Tesla is all about FSD and differentiating the company's technology vs. increasing competition in the autonomous and self-driving space. The company announced Dojo, Tesla's supercomputer program, at last year's AI Day which is a neural network training computer that Musk says will be able to process vast amounts of camera imaging data much faster than existing computing systems. The chip is called "D1" and when scaled, it will increase bandwidth and decrease latencies for better AI performance as Tesla gains more control over its hardware and software operations down the road while anticipating Musk to provide important further updates on FSD and Dojo."

Wedbush Previews Tesla AI Day; Reiterates Outperform

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