Tesla, Inc. (NASDAQ:TSLA) shares extended their gains for the third consecutive session on Thursday, following the release of the electric vehicle maker's quarterly results. Gary Black of Future Fund shared his insights on the stock's movement and the company's future trajectory.
What Happened: According to Black, the 17.6% surge in Tesla's stock post-earnings is attributed to the optimistic product outlook conveyed in the earnings report and confirmed by CEO Elon Musk during the earnings call.
"There is no other way to interpret this language than that TSLA is readying new more affordable models using both the next gen and existing manufacturing platforms for first production by 2025/1H," the analyst said. This, according to the fund manager, is bullish since it points to the company expanding its total addressable market with more affordable compact vehicles to the mass segment by mid-2025.
However, Black noted that Musk's emphasis on Tesla's commitment to autonomy has yet to resonate with institutional investors. The lack of discussion on the robotaxi opportunity since the earnings release suggests that investors remain cautious.
Black pointed out that the minimal impact on Uber and Lyft shares indicates that investors may not perceive Tesla's unsupervised ride-hailing as a significant threat to these companies.
But he did not rule out narrative change on Aug. 8, when Tesla is scheduled to unveil robotaxis. "So far TSLA's continued focus on more affordable non-robotaxi vehicles seems to be what's important," he said.
Why It Matters: Despite the stock rally, skepticism remains among some analysts. GLJ Research's Gordon Johnson interpreted Tesla's product roadmap language as indicating a potential abandonment of the sub-$30K car, with a shift towards cost-reduction strategies for existing models.
Concerns persist regarding Tesla's core auto gross margin and significant free cash flow depletion, prompting cautious outlooks from analysts like Wedbush's Daniel Ives.
Tesla ended Thursday's session up 4.97% to $170.18, according to Benzinga Pro data.
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