According to Elon Musk, Tesla (NASDAQ:TSLA) has always been more than just an automobile manufacturer. Beyond its ambitious goal of accelerating the global transition to sustainable energy, Tesla positions itself as a technology company, driving forward projects such as autonomous robotaxi and the humanoid robot Optimus.
Known for his boisterous marketing, Musk admitted in an earnings call earlier this year that perhaps he was a bit too ambitious with his robotaxi predictions. Still, the flamboyant CEO remains upbeat about Tesla’s ability to master this technology by the end of this year or next.
The company’s prospects will largely depend on its ability to fulfill its leaders world-changing visions. The trillion-dollar question is whether it succeeds in doing so.
James Foord, a 5-star investor, acknowledges that Tesla may fall short of Musk’s hopes and dreams. However, he believes the company still holds enough potential to warrant investment.
“Reality will likely fall short of Musk’s lofty expectations, but even then, we could be looking at an entirely different Tesla in 2–3 years,” Foord noted.
In addition, while Foord acknowledges the disappointing Q2 auto numbers, he sees positive signs in other areas. “Service revenues and energy revenues are growing at a fast click, now representing over 25% of Tesla’s total revenues,” he writes.
Regarding the Optimus project, Foord mentions projections that could significantly boost Tesla stock. “Musk believes long-term demand for robots like Optimus could reach 20 billion units. Of course, even if Tesla doesn’t serve the whole market, it is still a huge number,” says the investor.
Overall, Foord believes “the worst-case scenario was priced into the stock a few months ago,” indicating that Tesla’s revenues, margins, and stock price may have stabilized. This, according to Foord, provides investors with an opportunity to invest in Musk’s AI initiatives. Even if these ambitions are not fully realized, they could still yield significant returns for current investors.
Consequently, Foord maintains a Buy rating on Tesla shares. (To watch Foord’s track record, click here)
Meanwhile, opinions on Wall Street are more divided. Over the past 3 months, Tesla has received 30 analyst ratings, with 11 recommending a Buy, 12 a Hold, and 7 a Sell, leading to an overall Hold consensus rating. With a 12-month average price target of $213.92, Tesla shows a potential downside of ~4%. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
