Tesla's current valuation is cheap in hindsight if the company successfully applies AI
Morgan Stanley rating 'Must Own':
Jonas added that despite the downgrade, Morgan Stanley views Tesla as a "must own" in an EV portfolio and as an industrial "standard-bearer" for electric transport and renewable energy economy.
Motley Fool rating 'All in Buy':
For that reason, risk-tolerant investors who believe Tesla is on the cusp of solving autonomy should consider buying a few shares of this AI growth stock today. But investors that lack confidence in the robotaxi narrative should put their money elsewhere.
Someone posted an article about Elon Musk implies Tesla's stock 'Overvalued'. That article, which used outdated info, misinterpreted what Elon says. Tesla's current valuation may appear cheap in hindsight if the company is successful with its push into software and services.
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ArtificiaI Intelligence - Full Self Drive Synergy
It's no secret that Tesla commands a premium valuation. With a market capitalization of $835 billion, the company is worth as much as the next nine automakers combined. Some investors simplify cannot fathom the reason for that premium, but CEO Elon Musk thinks the answer is artificial intelligence (AI) -- or more precisely, the full self-driving (FSD) platform the company is developing.
Tesla's FSD advantages
Tesla is far from the only company working on self-driving vehicles, but it does have two noteworthy advantages. First, Tesla has more autonomous driving data than other automakers because its fleet of autopilot-enabled cars is larger. That data advantage hints at superior FSD software because training data is the foundation of good AI. Second, Musk believes the in-car supercomputer Tesla engineered for its FSD platform is the "most efficient inference computer in the world."
Tesla increasing profitability
Additionally, software and services (e.g., FSD software and autonomous ride-sharing services) tend to come with much higher margins than hardware (e.g., electric vehicles). That means Tesla should become increasingly profitable in the future, which is especially noteworthy because it already has the highest operating margin among volume carmakers.
Tesla cut production cost in half
Tesla plans to implement a new vehicle assembly process at its Gigafactory Mexico in 2024. According to management, the new system could cut production costs in half and reduce its factory footprint by 40%. Tesla is also evolving toward software and services, both of which offer higher margins than auto manufacturing.
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$BYD COMPANY(01211.HK$ $BYD Co.(BYDDF.US$ $S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$ $Tesla(TSLA.US$ $VOLKSWAGEN A G(VWAGY.US$ $NIO Inc(NIO.US$ $Li Auto(LI.US$ $XPeng(XPEV.US$ $General Motors(GM.US$ $Ford Motor(F.US$ $Rivian Automotive(RIVN.US$ $TOYOTA MOTOR CORP(TOYOF.US$ $MERCEDES-BENZ GROUP AG(MBGAF.US$
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I reflected trading experiences by writing journals. My comments are for educational purposes not financial advice.
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