Tesla’s Valuation Soars: Analyst Predicts $800 Price Target
Network Services Drive Value
Tesla’s stock may have taken a hit recently, but a top analyst is betting big on the electric vehicle giant’s future. Morgan Stanley’s Adam Jonas has raised his price target to $430, with a bull case scenario of $800 per share. The key driver behind this optimism? Tesla’s “network services,” which include autonomy, charging, maintenance, software upgrades, and media content.
A Material Competitive Advantage
Jonas believes Tesla has established a significant competitive edge in these areas, which make up the largest bulk of the company’s current value. He values these network services at $168 per share, or 39% of the total value target. Additionally, Jonas sees huge potential in Tesla’s autonomous rideshare service, valuing it at $90 per share – just one dollar more than his value for the company’s core automobile business.
Autonomous Robotaxis: The Future of Transportation
In his bull case scenario, Jonas predicts Tesla will sell 7 million vehicles by 2030 with a 26% gross margin. The auto business is valued at $130 per share in this scenario, with the ridesharing service making up a whopping $263 per share, or 33% of the $800 price target. Jonas pegs Tesla’s network services at $248 per share in his bull case.
Embodied AI: The Key to Upside
According to Jonas, “embodied AI” – the integration of artificial intelligence into physical systems – will drive upside to the revised $800 bull case. This technology has the potential to revolutionize industries beyond just transportation.
Tesla’s Stock Performance
Despite recent losses, Tesla’s stock has had an impressive run, gaining 62.5% in 2024. The company’s refreshed Model Y in China has also contributed to its growth. With a 91 Composite Rating out of a best-possible 99, Tesla stock remains a top pick for investors.
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