As Tesla Stock Sneaks Into Positive Territory For Year Fund Manager Says Not 10/10 Robotaxi Event But This Would Strengthen Fledgling Recovery (alt HL)
Tesla, Inc. TSLA shares climbed nearly 5% Monday and settled at a psychological resistance of $250, with optimism concerning third-quarter deliveries outperformance fueling much of the upside. Amid the stock surge, a fund manager weighed in on the potential impact of the upcoming Oct. 10 Robotaxi launch event on the stock.
10/10 Stock Mover? Future Fund LLC Managing Partner Gary Black is not convinced that Oct. 10 would be a catalyst for the stock, although he didn’t rule the possibility out. He said his apprehension stemmed from the fact that Tesla’s full self-driving technology is not yet close to the 99.99% efficacy needed for unsupervised autonomy.
Most analysts have discounted supervised FSD in their models, assuming a 15-20% take rate for the existing fleet and current deliveries. Also, analysts have assumed that supervised FSD with 97% efficacy will sell more Teslas, he added.
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Upbeat On Low-End Model: Black reiterated his optimism regarding the $25,000-$30,000 compact car from Tesla’s stable. The optimism is premised on what happened in 2019-2020 to the fundamentals and the stock after the Model Y launch, he said.
The Model Y was launched in 2019 amid shorts’ high skepticism but the vehicle “ushered in a whole new TAM by vaulting TSLA into the fast-growing CUV category,” he added.
The fund manager said that the launch of a sub-$30K car on Oct. 10 is not very certain, but if it does, that’s more of a reason to buy the stock. He said that an affordable electric vehicle will allow Tesla to leverage its brand, higher range, superior tech, and better performance in the large compact category, where Toyota Motor Corp.’s TM Corolla is the leader.
“Similar to 2019-2020, $TSLAQ shorts don't understand the incremental TAM math where most TSLA Compact volume will be incremental, and not cannibalized from Model 3, which competes in an entirely different category (affordable sedans),” Black said.
Although Tesla’s short interest is far lower currently compared to 2019-2020, the likely change in the current trajectory of earnings estimates from very negative to positive will change the Tesla investment narrative, the Tesla bull said. He sees Tesla’s volumes rising again, driving earnings estimates higher, which in turn will propel the stock price higher.
Tesla ended Monday’s session up 4.93% to $250, according to Benzinga Pro data. With the recent rally, the stock has turned to black for the year and is up 0.61%.
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