Tesla seems to be that stock that exists in its own world, it is unstable, unpredictable and is frequently driven more by Elon Musk promises than its actual fundamentals. The recent trembling demonstrates that while investors continue to be captivated by Tesla’s potential, particularly the robo-taxi vision, they’re also eager for evidence.
Also, Tesla remains more of a vision for the future of mobility and less of a car company. That’s what makes it so thrilling, but also very stressing, since the hype travels faster than the technology itself.
Tesla’s upside opportunity is dependent on innovation in robo-taxis, full autonomy, and its overall vision of AI-enabled mobility. If robo-taxis rise half as fast as Musk estimates, the firm can unlock a gigantic new revenue stream and re-rate its valuation much higher.
Also, it seems like Musk’s new compensation plan is evidence that he’s entirely motivated to perform. On the other hand, robo-taxi service is in its early stages, with Austin being the only one tested and a safety monitor on board, which is far from the driverless revolution that investors were led to believe. The irregular trading pattern of the stock indicates that markets are running out of patience with “next year” breakthroughs.
However, Tesla will ultimately win on scaling robo-taxis and next-generation tech, but the journey will be wobbly and more gradual than Musk’s timeline dictates. In the meantime, the stock is stuck in a trade that is fluctuating until something authentic and beyond words comes along.
For investors, the question isn’t whether Tesla has vision, it obviously does, but whether it can implement that vision quickly enough to fulfill Wall Street’s hunger. Until robo-taxis deploy meaningfully, the stock will likely continue to bounce around its range. But if Tesla can achieve even a small fraction of its promises, it would be a major turning point.
