Tesla stock surges to ATH price in 3 yrs amid its Autopilot HW Director to join Amazon's Zoox and GM's Cruise to shutdown
1) Investopidea:
Tesla shares soared nearly 6% to close at an all-time high of $424.77 ($424.88 at high) on Wednesday, marking the stock's first record close in three years after six straight days of gains.
The gains came Goldman Sachs analysts raised their price target to $345 from $250, though that would represent a steep discount from Tesla’s record closing price Wednesday.
The analysts warned Tesla could face “fundamental headwinds to the core auto business,” but said the company could gain from long-term opportunities related to full-self driving cars and robotics as a potential beneficiary of the artificial intelligence (AI) boom.
My Take:
I predicted that Tesla stock would hit a new historical high but it came earlier than expected. Tesla share is +82.6% (3 months) and +70.9% YTD at market closed today. Someone said the share price is pumped but I beg to differ because of 2 reasons. First there is a huge gap between the price target and the actual share price and the rally has been going on for almost 4 months - analysts are trying to "catch up". Second the company's fundamentals are sound and the catalysts are coming one after another. Read here
20+2 Reasons Why Tesla stock is up and may reach ATH price soon
20+2 Reasons Why Tesla stock is up and may reach ATH price soon
2) Benzinga (via Moomoo)
Zheng Gao, former Director of Engineering, Autopilot Hardware and Product Design-Electronics at EV Tesla, has joined Amazon robotaxi unit, Zoox. Zoox announced Gao will join Zoox as Director of Hardware Engineering.
Late in October, Zoox co-founder Jesse Levinson dismissed the possibility of Tesla deploying autonomous vehicles without safety drivers in California next year, alleging that the EV giant lacks a technology that works. Tesla CEO Elon Musk subsequently hit back at Levinson saying Zoox would have been dead if it hadn't got acquired by Amazon in 2020.
Late in October, Zoox co-founder Jesse Levinson dismissed the possibility of Tesla deploying autonomous vehicles without safety drivers in California next year, alleging that the EV giant lacks a technology that works. Tesla CEO Elon Musk subsequently hit back at Levinson saying Zoox would have been dead if it hadn't got acquired by Amazon in 2020.
My Take:
The resignation obviously has no impact on the company and the stock. Zoox's founder is stepping its own feet by saying " Tesla FSD doesn't work" and now hiring the company's director in the field. Electrek (Fred Lambert again) published a post about the resignation implying that "Tesla FSD unit has internal problems". The opinion post is just a baseless speculation and Lambert is well-known in reporting negatively about Tesla frequently.
3) The Verge
General Motors said it would no longer fund its Cruise robotaxi service as it seeks to focus its spending on autonomous vehicle development specifically for personally owned vehicles.
My Take:
There are 2 reasons for Cruise Robotaxi to shut down. First the project became too expensive for GM to justify the huge amounts of money spent to prop it up. And the automaker found it increasingly difficult to convince its shareholders that the money-losing operation would eventually pay off. The robotaxi subsidiary lost a staggering $3.48 billion in 2023 and has been seen by some as an albatross for the automaker, sucking up cash and lacking a clear path to profits. Second Cruise is facing a strong competitor like Tesla which said it plans to launch its own robotaxi service in 2025. But I think the real reason is that the company’s approach to autonomous driving technology is not sustainable - the strict regulation is blocking the fleet to test on a large scale. Google's Waymo Robotaxi is also facing a similar problem.
4) What will happen next?
Most analysts upgrade Tesla stock to a higher price target citing Robotaxi as one of the growth potential. The 2 articles I shared are a stark reminder that more Robotaxi companies will shut down including those in China if the regulation is restricting scaling. Tesla FSD chose to stay 'Supervised" and proceeded in large scale solve the cash burning problem.
If the stock continues to surge after the Q4 earnings, the fundamentals and macroeconomics are working and not the hedge funds pumping.
Source:
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