Elon Musk’s latest high-flying prediction for Tesla (TSLA) looks pie in the sky even by his standards.
“I see a potential path that’s worth more than Apple and Saudi Aramco combined,” Musk proudly announced on the company’s conference call Wednesday.
If you do the math, that would eventually put Tesla’s value at around $4 trillion. Tesla’s current market cap is $652 billion, according to Yahoo Finance data.
Analysts say the assessment may not happen for eons, if at all.
“That seems pretty far-fetched,” Wells Fargo equity analyst Colin Langan said on Yahoo Finance Live (video above). “You would have to give them full credit for all of these factors, which I tend to see as long-term optionality issues. So things like, can you get real level 4 self-driving, does the Optimus-Bot Dojo have some value, and these future projects. I think from a pure car manufacturer side, that [valuation] will be extremely difficult.”
Tesla CEO Elon Musk attends Offshore Northern Seas 2022 in Stavanger, Norway on August 29, 2022. NTB/Carina Johansen via Portal
Tesla’s road to Musk’s latest goalpost got off to a rocky start on Thursday.
Tesla stock is down more than 6% as of 1:40 p.m. ET as the EV maker warned it would miss its 50% growth target for deliveries this year. Tesla’s overall sales in the third quarter also fell short of analyst estimates.
Wall Street also speculated that there could be a slowdown in Tesla sales in China soon, which could put further pressure on the stock.
“Tesla continued to attribute the third-quarter supply shortfall to ending the historic supply wave to lower logistics costs, but we believe weaker demand in China is the most likely explanation,” Guggenheim analyst Ali Faghri wrote in one Notice to Customers. “We highlight the following: 1) China shipments last week likely down 30%+ from Q2 levels (could end shipments wave, could be weaker demand); 2) Tesla put a modest stimulus on Chinese vehicles in September, pushing sales towards the end of the quarter 3) Waiting times in China cut from 20+ weeks to 1-4 weeks at the end of Q3 4) Overall BEV sales remain in China strong, but Tesla losing market share is not a big problem, taken together they indicate potential demand saturation in China.”
The story goes on
Faghri reiterated a neutral rating on Tesla stock, adding, “We expect Tesla to cut prices in Q4 and are currently embedding a 5% price cut in China over the next year in our model (although they end up… could be bigger).”
Brian Sozzi is a freelance writer and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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