Musk's xAI has completed a new round of financing with a valuation reportedly exceeding $40 billion.
After visiting the Austin factory on site, BofA gave Tesla a target price of $400.
BofA analyst John Murph expressed confidence in Tesla's growth prospects for 2025 and beyond, with autonomous driving and robotics businesses leading the growth. FSD is making significant progress, adoption rates are increasing, and Optimus development is expected to accelerate. New models next year will expand the total addressable market (TAM).
Tesla hit a two-year high overnight, with multiple brokerages raising their target price for the company. After visiting Tesla's Texas Gigafactory, a BofA analyst even increased the target stock price by $50 to $400.Tesla's target stock price was raised by $50 to $400 after visiting the Tesla factory in Texas by a BofA analyst.
Bank of America analyst John Murph said in Thursday's report:
After visiting the super factory located in Austin, Texas, USA by Musk, including meeting with the investor relations department, factory tour, and test drive experience, there is confidence in its growth prospects for 2025 and beyond, because it is believed that autonomous driving and robot business will lead the growth.
Murph further stated:
Tesla is expected to continue to improve its profit margin, currently mainly driven by hardware, but with the growth of Full Self-Driving (FSD) software and charging services, it will shift more towards value-added software.
It is expected that Tesla's sales will reach $123.171 billion in 2026, with an improvement in operating margin. Net income and free cash flow are expected to grow significantly in 2025 and 2026. We reiterate a buy rating and raise the target price from $350 to $400, based on a multiple of 60 times enterprise value/earnings before interest, taxes, depreciation, and amortization (EV/EBITDA).
FSD has made significant progress, with Optimus development expected to accelerate.
Murph pointed out in the report:Tesla demonstrated significant progress in FSD technology and is expected to launch autonomous ride-hailing services in the future.：
Tesla的FSD技术在异常路况下表现出色，预计干预频率将降至每0.01 million英里一次，这接近安全推出自动驾驶出租车业务的要求。
For reference, Waymo's robot taxi service has been in operation before reaching the milestone of intervening once every 17,000 miles, Tesla believes that with the growth of its Artificial Intelligence computing power (as of the end of October, 50,000 H100 chips have been installed and activated), it will soon reach this milestone.
展望明年，Murph预计，新车型将扩大可获取市场总规模（TAM），全自动驾驶（FSD）的采用率正在增加：
Tesla计划在2025年上半年推出一款成本更低的车型，这将增加可获取市场总规模，预计这款车的成本将低于0.03 million美元，包括目前在美国可获得的7500美元电动汽车税收抵免。Tesla还确认，低成本车型不会是其2025年唯一的新车型。
此外，FSD的采用率正在上升，截至2023年第一季度，Tesla在1.8 million辆符合条件的车辆上有0.4 million订阅用户，在2024年第二季度和第三季度，订阅用户的数量增长速度超过了符合条件的车辆数量。Tesla之前曾为FSD收取几千美元的预付费用，但自从改为订阅模式后，FSD的采用率增长得更快。
In addition, the development of Optimus may be accelerated, as Murph stated:
Currently, Optimus is used for sorting 4680 battery cells inside the factory and is being tested in multiple scenarios. Tesla plans to deploy 1000 Optimus robots in its factories by the end of 2025. Optimus currently accounts for only a single-digit percentage of Tesla's computing resources. With the maturity of robotaxi technology, this will accelerate the development of robot technology and improve production efficiency in 2026 and beyond.
① Elon Musk's artificial intelligence startup xAI has completed a $6 billion new financing, with a valuation exceeding $40 billion. ② xAI was founded by Musk in 2023 and completed a $6 billion financing in May of this year, with a valuation of $24 billion at that time.
Musk's artificial intelligence startup xAI has raised $6 billion in new capital, completing a financing activity that has been ongoing for several months. It is said that in this round of financing, xAI's valuation has exceeded $40 billion.
According to documents submitted to the U.S. Securities and Exchange Commission (SEC) on Thursday, this equity financing comes from 97 investors, including shares valued as low as $0.077593 million.
The company did not list the names of investors or provide data on company valuation. However, according to Bloomberg's report in October, xAI is seeking new financing with a pre-investment valuation of $40 billion.
Founded by Musk in 2023, xAI has been actively raising funds for the project ever since. In May of this year, the company completed another round of $6 billion in financing, with the company's valuation at $24 billion, including the latest cash raised.
Many of xAI's current investors, including Sequoia Capital and Andreessen Horowitz, are also investors in Musk's other businesses like X and other ventures.
xAI has already invested some of its funds in the latest 'supercomputer factory' project in Memphis, which was put into use earlier this year. At that time, local officials referred to it as 'the largest multi-billion-dollar investment in the history of Memphis', and the expanding footprint of the facility has also attracted other major technology companies to the area, including nvidia, dell technologies, and AMD.
Currently, xAI's main product is a chatbot named Grok, targeting paid users of X.
Recently, Musk has expanded the lawsuit against its main competitor, the ChatGPT manufacturer OpenAI, accusing OpenAI of illegally attempting to monopolize the artificial intelligence market and squeeze out competitors.
In October of this year, OpenAI just completed a new round of $6.6 billion in financing, bringing the company's valuation to $157 billion, placing the company among the world's privately held companies with the highest valuation. In addition to Thrive Capital and other venture capital firms, microsoft and nvidia are also among the investors.
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