Over the last month, TSLA stock has been on a roller coaster. There were questions over demand for the company’s cars, and whether it’d release a new affordable model or not, which caused the stock to take multiple hits. Then, CEO Elon Musk announced on X that Tesla’s long-awaited Robotaxi model would be unveiled in August, sending the stock higher.
But Wall Street wasn’t ready to go all in on Robotaxis, and analysts kept downgrading TSLA stock. The price continued to fluctuate before the company’s Q1 earnings call, in which Musk said that Tesla (NASDAQ: TSLA) is planning to release not one, but multiple affordable models, a statement that served as music to Wall Street’s ears. Even analysts like Wedbush’s senior equity analyst Dan Ives were singing the praises of Tesla, clinging firmly to their bullish stance.
Dan Ives’ Opinion on TSLA Stock
During Tesla’s Q1 earnings call, Elon Musk said that Tesla is way more than a car company, and that analysts and investors should start valuing it like a tech or AI company instead, since it’s way ahead of the competition when it comes to areas like full self-driving. That doesn’t mean that Tesla is doing badly as a car company. In fact, it has a dominant position in the EV market, with a global market share of about 20%, and it also has around 50% of the U.S. market.
Many analysts, including Wedbush’s Dan Ives, are starting to understand Musk’s point, and seeing Tesla for the AI giant it really is. When looking at Tesla’s 2024 Q1 earnings, we can see that, for the first time since 2020, quarterly revenue dropped by 8.5% year-over-year, coming in $950 million below expectations. Meanwhile, operating margin hit 5.5% compared to last quarter’s 8.2%, while operating income was $1.17 billion. Even though Tesla’s earnings came in below expectations, the stock soared thanks to Musk’s bullish comments on upcoming affordable vehicles and a Robotaxi network, which have completely turned things around for the company on Wall Street. Dan Ives, for example, said that he was bullish on autonomy and Robotaxis, but he didn’t think they’d be enough to help Tesla in the near-term because they need another five or six years to really scale.
Tesla is More than just a Car Company
Ives believes Tesla having an affordable vehicle is more important, and whether you agree with his opinion or not, it seems like Musk and everyone at Tesla are deciding to appeal to both Wall Street and long-term investors, saying that the company will both solve autonomy and produce cheaper cars. This could be one of the reasons why Tesla stock is a safe buy, as it has a strong competitive advantage in the EV market, a visionary leader in Elon Musk, and a loyal customer base that supports its mission to solve autonomy in vehicles.
One big reason for Dan Ives’ bullishness on Tesla stock is Tesla’s position as a leader in the EV revolution, as he sees a future dominated by EVs, with Tesla at the forefront. Ives is also betting that even if Tesla stumbles a bit now, its lead in technology and brand recognition will propel it long-term. We’ve all seen how impressive FSD has become in a very short amount of time, and it continues to improve more and more as Tesla updates it every week or two, and this alone indicates that the company is very close to solving autonomy. In fact, a video was recently posted on X showing a Tesla car running on FSD Version 12 in Germany, which indicates that an FSD launch in Europe could be very soon.
Also, the company recently launched the enhanced Autopilot monthly subscriptions in China, which could be a stepping stone before it introduces FSD to China as well, opening up new sources of revenue and boosting margins.
Tesla’s EV Dominance
Tesla is still making waves in the EV industry, unlike most of its competitors who are struggling to keep their heads above the water. Also, even though it took a massive hit recently, TSLA stock momentum is changing for the better. During the earnings call, Elon Musk talked about how a lot of automakers are switching over to hybrids and how that isn’t the right thing to do right now, as EVs will completely dominate in the future.
He might just be right, as the EV market is expected to hit approximately $1.6 trillion in 2030, and while the market for hybrids is expected to grow at a similar rate, EVs will likely dominate as government subsidies for them increase all over the world, and as newer and more affordable models come out, including Tesla’s affordable models. Tesla is already making sure that it’ll dominate the market in the future, recently inking strategic partnerships with battery giants like CATL and LG Energy Solution, which will allow Tesla to increase its production massively.
No doubt, there are valid concerns about competition heating up in the EV space, and production hiccups can throw a wrench in the best-laid plans. But for now, analysts like Dan Ives seem to believe that Tesla’s strengths outweigh its weaknesses. In other words, Tesla investors should be looking at the long-term, betting that Tesla will continue to disrupt the auto industry and emerge even stronger in the future.
What’s Next for TSLA Stock?
According to Musk, Tesla’s robotics business is all the more reason to be bullish on Tesla. He said in the earnings call that he expects Tesla to be able to sell its robots externally by the end of next year, and that’s not the only thing he said about Tesla’s AI capabilities. He also said that if somebody doesn’t believe that Tesla is going to solve autonomy, then they probably shouldn’t be an investor in the company, going as far as saying that Tesla would be able to solve autonomy even if he wasn’t involved, which shows how confident he is that the work was close to completion.
Musk also revealed the true scale of his AI-related ambitions by disclosing that Tesla’s AI training compute capacity will increase by around 467% year-over-year to 85,000 equivalent units of Nvidia’s H100 GPU by the end of 2024. Tesla will definitely use this AI training capacity to train and develop its FSD software, and maybe even Optimus, to make them a lot better than they already are, and while many people remain skeptical, Tesla is definitely well-positioned to become one of the top AI companies in the world as FSD takes off.
As a car company, Tesla has strong potential to dominate the industry in the future. And with proper execution, the company is likely to achieve most of its planned projects, all of which could lead to the stock skyrocketing and reaching the $2 trillion valuation Dan Ives talked about. While the company may face some risks and challenges, like regulatory uncertainty, production bottlenecks, and increasing competition, at the end of the day, Tesla is the only EV company actually making money and not burning billions while achieving nothing.
For this reason, we believe that it will continue to grow. Maybe it’ll even surpass the $2 trillion mark, and reach $5 trillion like Ark Invest CEO, Cathie Wood, predicted. In fact, Musk recently agreed with one of Wood’s opinions on Tesla, calling the company the biggest AI project on Earth.
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