We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Electric Vehicles & Artificial Intelligence, is it Time to Buy Tesla's Stock?
Read MoreHide Full Article
Shares of Tesla (TSLA - Free Report) soared +10% on Monday primarily attributed to an upgrade from Morgan Stanley (MS - Free Report) , who is bullish on the EV pioneer's AI capabilities raising their price target to $400 a share.
This represents 46% upside from current levels, with Tesla's stock up +14% over the last month and skyrocketing +121% YTD. A short-term bullish trend was that Tesla blasted through its 50-day moving average and was able to hold on to the gains ending Monday’s trading session at around $273 a share.
Image Source: Zacks Investment Research
Morgan Stanley’s Upgrade
Morgan Stanley’s very bullish upgrade and lofty price target were premised on Tesla’s developmental supercomputer, Dojo, which has machine-learning capabilities.
This could largely place Tesla in the artificial intelligence conversation with Morgan Stanley believing the company can sell its AI technology to other automakers. In theory, Tesla can use its own chips to boost margins and lower operating costs rather than relying on Nvidia (NVDA - Free Report) or other chipmakers.
Ultimately, Morgan Stanley believes this may add up to $500 billion to Tesla’s valuation with AI applications already used in the company's autopilot features. Very appealing for an automaker that has a $788.74 billion market cap and is the sixth largest holding on U.S. stock exchanges just behind Nvidia.
Image Source: Zacks Investment Research
EPS Estimates & P/E Valuation
Keeping an eye on Tesla’s probability, earnings are currently forecasted to dip -15% this year at $3.46 a share compared to $4.07 per share a year ago. However, FY24 earnings are projected to stabilize and soar 34% to $4.64 per share.
Image Source: Zacks Investment Research
From a price-to-earnings perspective, Tesla’s stock trades at 71.8X forward earnings which is 27% below its high of 99.1X over the last year but 24% above the median of 57.6X.
With that being said, the chatter of Tesla potentially adding billions to its valuation through Dojo and AI capabilities may continue justifying the premium the EV leader can command.
Image Source: Zacks Investment Research
Bottom Line
For now, Tesla’s stock lands a Zacks Rank #3 (Hold). There is certainly a bullish technical setup in TSLA shares at the moment and longer-term investors may still be rewarded for holding on to Tesla’s stock at current levels as well.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Electric Vehicles & Artificial Intelligence, is it Time to Buy Tesla's Stock?
Shares of Tesla (TSLA - Free Report) soared +10% on Monday primarily attributed to an upgrade from Morgan Stanley (MS - Free Report) , who is bullish on the EV pioneer's AI capabilities raising their price target to $400 a share.
This represents 46% upside from current levels, with Tesla's stock up +14% over the last month and skyrocketing +121% YTD. A short-term bullish trend was that Tesla blasted through its 50-day moving average and was able to hold on to the gains ending Monday’s trading session at around $273 a share.
Image Source: Zacks Investment Research
Morgan Stanley’s Upgrade
Morgan Stanley’s very bullish upgrade and lofty price target were premised on Tesla’s developmental supercomputer, Dojo, which has machine-learning capabilities.
This could largely place Tesla in the artificial intelligence conversation with Morgan Stanley believing the company can sell its AI technology to other automakers. In theory, Tesla can use its own chips to boost margins and lower operating costs rather than relying on Nvidia (NVDA - Free Report) or other chipmakers.
Ultimately, Morgan Stanley believes this may add up to $500 billion to Tesla’s valuation with AI applications already used in the company's autopilot features. Very appealing for an automaker that has a $788.74 billion market cap and is the sixth largest holding on U.S. stock exchanges just behind Nvidia.
Image Source: Zacks Investment Research
EPS Estimates & P/E Valuation
Keeping an eye on Tesla’s probability, earnings are currently forecasted to dip -15% this year at $3.46 a share compared to $4.07 per share a year ago. However, FY24 earnings are projected to stabilize and soar 34% to $4.64 per share.
Image Source: Zacks Investment Research
From a price-to-earnings perspective, Tesla’s stock trades at 71.8X forward earnings which is 27% below its high of 99.1X over the last year but 24% above the median of 57.6X.
With that being said, the chatter of Tesla potentially adding billions to its valuation through Dojo and AI capabilities may continue justifying the premium the EV leader can command.
Image Source: Zacks Investment Research
Bottom Line
For now, Tesla’s stock lands a Zacks Rank #3 (Hold). There is certainly a bullish technical setup in TSLA shares at the moment and longer-term investors may still be rewarded for holding on to Tesla’s stock at current levels as well.