Tesla Robot Axis: Wall Street weighs in on Elon Mus resonance's latest wager

Shares of Tesla (TSLA) closed up nearly 5% on Monday, as investors bought into the latest statement from chief executive Elon Musk that Tesla will debut its long-awaited robotic rental cars on August 8th.

Before resonance announced that Tesla would launch a robot taxi after Friday's close, Reuters reported that Tesla had canceled plans to build a long-awaited electric car for less than $30,000, which some have called the Model 2. Reuters said Tesla would focus on self-driving robot taxis, and resonance responded on X that Reuters was "lying again". After responding on X that Reuters was "lying again," Kirchner returned to the platform to announce the unveiling of the robotic taxi, which is generally recognized as having no曏 or pedals. Whether or not Tesla will eventually launch a low-cost electric car remains an open question.

Although Tesla's stock price soared on Monday, Wall Street analysts had mixed feelings about Tesla's announcement.

Emmanuel Rosner of Deutsche Bank said the news of the robotic rental car "changes the narrative" for Tesla.

"If the shift that began with the Model 2 is confirmed again, the bull case for Tesla is probably that Tesla has decided to maintain its unique AI and software advantage by focusing on robotic rent-a-cars, an approach that very few OEMs have been able to replicate, and one that would be economically beneficial," says Rosner. Few OEMs can replicate this approach, and it will be more economically beneficial to do so.

The bearish side of the coin, however, is that Tesla is abandoning one of the "key reasons" why many hold the stock: the Model 2 as a volume game that will "re-accelerate sales, margins, and FCF (free cash flow)," said Rossner ". It also means that Tesla's bullish thesis is based on Tesla cracking the Autopilot code, which would require going through a series of surveillance hurdles to 鈥竝糹kewise get enough data to train the software.

Rothner has a "buy" rating and a $189 price target on Tesla stock.

On the flip side, Tasha Keeney, a prominent Tesla bull at ARK Invest, believes that Tesla's long-term potential is largely related to autopilot and autopilot.

"They have an unrivaled data advantage over all the other companies that are solving the problem of fully automated driving," Keeney said in an interview with Yahoo Finance Live. As with artificial intelligence, data is key to training models and building working models of autonomous driving, Keeney said. Tesla's Fully Self-Driving (FSD) beta is nearing completion, she said, noting that Tesla is accumulating 2.5 million miles of self-driving data per day from customers. Competitors such as Waymo have recorded just over 10 million miles since the program began, Keeney said.

"We think this will drive Tesla's value going forward. Looking out five years from now, we think it's going to represent two-thirds of the value of the business five years from now. So we're very excited about this," Keeney said.

Cathie Wood, founder of ARK Invest, recently reiterated the firm's $2,000 price target for Tesla, predicting $10 trillion in revenue from robotic rental cars.

On the other side of the fence is Craig Irwin of Roth Capital, who is skeptical about robot taxis. He believes that today's price action is technical and not rooted in the fundamentals. Irwin has a Neutral rating on the stock and an $85 price target.

"Professional investors are concerned about momentum. They measure retail momentum very carefully, and all of my clients on Wall Street are measuring the upside of this news," Irwin said. After initially digesting the news, Irwin believes Tesla's self-driving technology is still a long way off.

"The power consumption [of the autopilot] will be with the powertrain [of the pre-electric car]... It's technically conceivable and feasible, but not in the [Tesla] vehicles that have been sold, and not in a form that anyone comes close to today," Irwin said.

Irving suspects that Tesla cars will need more enhanced sensors, cameras, and other equipment to be truly fully self-driving, and that what Irving calls the glamor of "networked taxis" is masking the company's larger underlying problems of lack of demand and intense competition.

"I think the stock price could be cut in half; I think there will be more price cuts. I think there's going to be more profit compression, and that's distracting from the fact that the company is shrinking right now," Irwin concluded.

Pras Subramanian is a reporter for Yahoo Finance. You can find more information on Twitter respond in singing Instagramfirst (of multiple parts)Concerned about himThe

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