Tesla (NASDAQ:TSLA) has juked bears several times in the past couple of months, as the stock has continued to surge despite dismal earnings and delivery reports. Not only that, one of the main arguments for buying Tesla, which was Elon Musk’s leverage over the current administration, also no longer applies. Even then, TSLA stock has recovered and has held up its premium. The stock slipped today after reports that the company is halting the production of Cybertrucks and its Model Y lineup, but this is unlikely to lead to any permanent damage.
All that buying pressure is thanks to optimism surrounding the company’s up-and-coming robotaxi event, “tenatively” scheduled for June 22, and Optimus robots. Elon Musk promised 1 million robotaxis by 2020 in 2019, and there have only been more delays. However, the timescale is very narrow this time around, so Musk’s promises may finally come true in a very limited fashion.
The National Highway Traffic Safety Administration (NHTSA) recently modernized its exemption process to facilitate the safe and timely deployment of automated vehicles. This could reduce Tesla’s approval time from years to months.
If the robotaxi event does indeed happen, there’s a good chance the stock could soar. Elon Musk has done a great job of pushing attention away from the underperforming core business and turning that into optimism for robotaxis and Optimus robots, both of which are still unproven and could take a decade or more to be profitable.
Tesla’s financials have flatlined and have started heading the other way. TSLA stock is certainly overvalued if you look at its fundamentals, but investors are no longer focused on the core business. I wouldn’t be surprised to see the stock going up if the company misses earnings yet again.
TSLA stock’s valuation now hinges on how Cybercab robotaxis and Optimus robots are going to pan out. In my opinion, things are unlikely to go as expected. I still wouldn’t dare short it, as it may only take another forecast from Elon Musk to send it rallying by double digits.
The long-term outlook remains gloomy if the core business keeps underperforming. Investors will eventually punish the stock if deadlines and earnings estimates are continuously missed.
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