Global leader in electric vehicles, “leader” of autonomous driving$Tesla (TSLA.US)$On top of a sharp rebound of 10.2% on Tuesday, the stock price rose more than 5% on Wednesday.

Electric vehicle stocks generally surged due to Tesla's announcement of better-than-expected second-quarter deliveries, and growing enthusiasm for the Robotaxi event to be held on August 8. More importantly, the two “superbuffs” of AI and energy storage have continued to catalyze a major rebound in Tesla's stock price in recent days. With industry-leading FSD fully automatic driving based on AI supercomputing systems and the upcoming RoboTaxi autonomous taxi, Tesla is undoubtedly a leader in the AI field, and Tesla's energy storage business is expected to benefit from the global wave of AI data center construction.

Dan Ives, a senior analyst from Wedbush Securities, a well-known Wall Street investment agency, raised Tesla's 12-month stock price target from $275 to $300 this week, reaffirming the “outperforming market” rating, and setting the most optimistic target price in a bullish situation at $400.

Morgan Stanley analyst Adam Jones, who has the title of “Tesla Majority”, maintained a target share price of up to 310 US dollars for Tesla this week and reiterated his “overbearing” rating on Tesla. As of press time, Tesla's stock price is hovering around $243.

The newly released delivery volume data that exceeded expectations was undoubtedly the main driving force behind Tesla's stock price surge. The company delivered 443,956 cars in the second quarter, down 4.7% from the same period last year, but 1.8% higher than FactSet's estimate of 436,000 cars. Wall Street analysts expect a range between 420,000 and 425,000 vehicles. Tesla produced around 411,000 cars during the quarter, which is also positive news. More sales than production means less inventory, which will ease the pressure on the company to cut prices.

Wedbush analyst Dan Ives emphasized: “With the successful implementation of most price reduction plans and global demand for electric vehicles stabilizing, particularly in China, we believe Tesla should use clear momentum and an easier competitive situation in the next few quarters to eventually achieve the 2 million vehicle delivery target soon, and the 2025 results will be easier to achieve.”

Dan Ives said that the key reason why Wedbush is optimistic about Tesla, the leader of electric vehicles, is that Wall Street institutions have realized that Tesla is probably the most underrated “AI investment target” in the US stock market. Ives and his analytical team believe that under the most optimistic circumstances, Tesla's single fully autonomous driving (FSD) business based on AI supercomputing may be worth as much as 1 trillion US dollars, exceeding Tesla's current total market value of about 700 billion US dollars.

On the Seeking Alpha website, well-known stock analyst Bill Moller said that Tesla's delivery data for the second quarter is certainly very optimistic. After experiencing a wave of sell-offs, analysts may have begun to move into an upward model for Tesla. Previously, they were all bearish on Tesla. Following the recent upward trend in stock prices, Tesla's current stock price is already above its 50-day, 100-day, and 200-day moving average. Some more optimistic stock analysts say Tesla bears have begun exiting the market one after another, and the stock price has begun a new round of “main upward wave” mode.

Morgan Stanley analyst Adam Jones, who has the title of “Tesla's majority,” has extremely strong target price expectations for Tesla due to the two “super buffs” of artificial intelligence (AI) and energy storage.

Tesla's “AI Buff” is finally starting to gain strength

As Musk said on Twitter, Tesla is not as simple as an electric car manufacturer; it is also a leader in the AI field.

In an interview with the media recently, Nvidia CEO Hwang In-hoon can be described as unstinting in praising Tesla's FSD based on AI supercomputing. Tesla FSD is based on Dojo supercomputing chips and Nvidia's high-performance AI GPUs (mainly H100; Musk said it will purchase Blackwell architecture GPUs in the future), and relies on these powerful hardware systems to support Tesla FSD's massive training/inference computing power requirements. Huang Renxun and many other tech leaders have publicly stated that Tesla FSD is currently the most advanced assisted driving system, which can completely free up human hands in most cases.

“Tesla is leading the world in autonomous vehicles.” Nvidia CEO Hwang In-hoon said in an interview with the media. Hwang In-hoon added, “What is really revolutionary about Tesla's 12th fully autonomous car is that it is an end-to-end generative model.” “It learns how to automate end-to-end driving by watching videos — surround videos, and uses generative artificial intelligence technology to predict paths and understand and drive cars. So this technology is truly revolutionary, and the work Tesla is doing is incredible.”

Hwang In-hoon also anticipates that one day “every car” will have some degree of autonomous driving capability — this development will require a large number of AI hardware computing power systems. “This technology is very similar to that of the big language model, but it only requires a huge training infrastructure,” he is referring to Tesla's FSD system here. “This is because there is video data, video data rate, video data volume is so high.”

According to information, Tesla's latest FSD 12 version is currently in the initial testing phase, and a 30-day free trial was offered to new car owners earlier this year. The current fee for Tesla FSD is $99 per month, or an advance payment of $8,000 to officially buy out FSD. Tesla reported in April that since its debut in March 2021, the cumulative mileage of the FSD has exceeded 1.3 billion miles.

However, FSD is still considered a Level 2 autonomous driving system by automobile regulators around the world, which means it needs to be used under human supervision, and has been subject to recall orders and government investigations into its technical capabilities in the US market.

Musk announced that he will launch his long-promised robotaxi (Robotaxi) on August 8. Tesla's new car will build a Tesla driverless electric taxi based on the latest upgraded FSD fully automatic driving technology.

“Sister Wood” Cathie Wood (Cathie Wood), who can be called “Tesla's number one fan” and “a staunch supporter of Musk,” believes that Tesla's market value is expected to exceed 8 trillion US dollars. Ark Investment Management Company, founded and led by “Cathie Wood”, recently updated its target price for Tesla. Ark expects Tesla's stock price to reach 2,600 US dollars by 2029. Ark's main logic for bullish Tesla is that it is expected that by 2029, nearly 90% of Tesla's market value and profits will be due to the RoboTaxi taxi business built on incredibly powerful AI supercomputing.

Ark's confidence in Tesla's ability to launch the RoboTaxi network within the next five years has increased dramatically. The agency believes that in the future, every Tesla vehicle will become an artificial intelligence-driven cash flow generating machine, and Tesla's business model is expected to shift from one-time car sales to a recurring sales base.

The end of AI is electricity! Tesla will fully benefit from the surge in electricity consumption in the future

For Morgan Stanley analyst Adam Jones, who has the title of “Tesla's majority,” Tesla's future most attractive investors may be the company's solar and energy storage business.

On June 25, Morgan Stanley issued a research report saying that Tesla holds a “key AI bottom card” and may become the core beneficiary of the next AI investment frenzy. This “AI undercard” is not Tesla's FSD or RoboTaxi robot taxi business, but Tesla's solar and energy storage business.

Tesla also released energy storage data in its latest delivery report. In the second quarter, Tesla deployed a total energy storage scale of up to 9.4 gigawatt-hours, the best quarter in its history. Jones, a Tesla bully, is strongly optimistic about Tesla's energy storage business, and believes that the demand for data center electricity brought about by the boom in AI deployment by global companies will make Tesla a key player in the US energy market.

The strongest gains in the US utility sector since this year have been concentrated in electricity stocks and renewable energy stocks. The main logic behind it is that these two major categories are regarded as one of the biggest beneficiaries of the unprecedented boom in AI deployment by global enterprises. After all, the scale of high-energy AI data center expansion and the wave of new construction, which is expanding exponentially with the intense demand for AI chips, is inseparable from the large-scale power supply foundation. This is also the origin of the mainstream view in the market that “the end of AI is electricity”.

Data centers alone are expected to triple their share of electricity consumption in the US, from 126 terawatt-hours in 2022 to 390 terawatt-hours in 2030, according to Boston Consulting's forecast data. Terawatt-hours are used to describe the largest electricity levels, and are usually used for national-level energy statistics, planning and evaluation of large-scale energy projects. Large industrial facilities, such as super steel plants, may consume less than 10 terawatt-hours of electricity in a year.

However, the extremely strong demand for renewable energy such as solar energy in global data centers is mainly due to the fact that under the global decarbonization trend, renewable energy such as solar energy may be the most important source of power generation, or not even one, and Tesla's energy storage equipment required to store huge amounts of solar energy for a long time will undoubtedly play the most central role as a “seller.”

edit/emily