Piper Sandler recommends investors to buy Tesla (TSLA.US) stocks because it believes the company "may have solved the problem of self-driving".
It was reported by Zhixin Finance App that Piper Sandler recommends investors to buy Tesla (TSLA.US) stocks because it believes the company "may have solved the problem of self-driving".
In the report released on Monday, Piper Sandler wrote, "Don't roll your eyes. Buy Tesla shares."
Piper Sandler emphasized Tesla's release of the fully autonomous driving (FSD) 12.5 version. The new version of FSD received very positive reviews in the first few days of use.
Piper Sandler analysts are well aware that Tesla has been notorious for making overpromises when describing its projects (including self-driving capabilities). For years, people have been hearing about Tesla solving the FSD problem "before the end of the year." But analysts believe that this time the situation may be different.
Piper Sandler analysts said, "Investors have become accustomed to ignoring Tesla's exaggerated claims about full self-driving. However, judging from comments on X platform, the Tesla 12.5 update is 'revolutionary.'"
Piper Sandler analysts also said that the upcoming Robotaxi event (postponed from August 8th to October 10th) may truly be Tesla's most important moment, because the company plans to launch a fully autonomous driving car, which could be launched as early as next year.
"We believe investors should consider the possibility that Tesla's decision to hold the Robotaxi event is not to divert attention from the decline in electric vehicle sales."
Piper Sandler analysts said that as Tesla's technology continues to advance, the subscription price for full self-driving may rise. If Tesla can launch a fully autonomous driving car, the current $99 monthly price will not be sustainable.
Piper Sandler believes that the subscription price will be close to $500 per month, which will bring more value to investors, depending on the acceptance rate and overall usage of Tesla's planned carpooling mode.
Tesla CEO Elon Musk optimistically predicted on the Q2 earnings call that Tesla cars equipped with unsupervised FSD will form a huge fleet of self-driving cars, which could significantly boost Tesla's valuation. Musk reiterated that Tesla's value is mainly in its self-driving technology, not other factors.
However, Truist Securities analyst William Stein released a report on Monday claiming that he almost crashed while testing Tesla's FSD. He concluded that the FSD version he tested "is indeed amazing, but it is far from 'fully' self-driving." Stein maintains a "hold" rating on Tesla's stock with a target price of $215.
It is worth noting that Tesla has replaced Ford as Morgan Stanley's preferred American automotive stock. Morgan Stanley believes that Tesla's stock price has a 40% upside, but says Tesla's expectation for self-driving taxis is "too high." Influenced by this news, Tesla rose 5.6% to $232.10 on Monday.