Key insights
- Wolfe Research maintained a 'Peerperform' rating on Tesla, citing solid fundamentals in core businesses like auto and energy. However, the stock's momentum hinges on proof points for longer-term initiatives such as robotaxi and AI services, which are facing slower ramp-up curves than anticipated. The article also mentions SpaceX's IPO interest and a significant cloud service agreement with Google, though these are separate entities from Tesla's stock performance and have distant timelines for impact.
Investing.com - Wolfe Research reiterated a Peerperform rating on Tesla (NASDAQ:TSLA), according to analyst Emmanuel Rosner.
Tesla shares are down 9% year-to-date, below the broader S&P up 8% but slightly better than Rivian down 15%. The main legacy automakers have performed better, with General Motors up 3% and Ford up 14%.
A key potential catalyst on the horizon is a merger with SPCX, which is set to IPO later this week. The telecom company carries a market cap of $1.78 trillion but remains unprofitable with a negative EPS of $2.94 over the last twelve months. According to InvestingPro data, SPCX operates with a moderate debt level and maintains liquid assets exceeding short-term obligations. Completion of any such merger is unlikely until mid-2027 at the earliest.
Fundamentals within the core businesses including auto, energy, charging and service appear to be performing well with solid auto demand, pricing increases and growing energy backlog. These businesses represent a small piece of valuation, with the much bigger part tied to confidence around longer-term initiatives across robotaxi, humanoids and ancillary AI services.
The ramp curves are shallower than previously expected, most notably with respect to robotaxi operations. Tesla needs to deliver robotaxi and Optimus proof points for the shares to find momentum, especially as competitors continue to ramp up.
In other recent news, SpaceX’s initial public offering has garnered significant attention, with demand exceeding the available shares. This oversubscription follows private discussions with investors, highlighting strong interest in the offering. Additionally, SpaceX has signed a substantial cloud service agreement with Google, valued at $920 million per month, which will provide access to computing resources, including NVIDIA GPUs and CPUs, starting in October 2026. This agreement is set to gradually increase capacity through September at a reduced fee.
In other developments, Finnair is in talks with SpaceX’s Starlink and Amazon’s Leo to enhance its inflight Wi-Fi services. The Finnish airline aims to finalize a plan for its Wi-Fi offering this year. Meanwhile, Elon Musk is set to virtually attend a closed-door technology conference hosted by ASML Holding NV to discuss the Terafab project, a joint venture between SpaceX and Tesla focused on developing advanced chips. This venture plans to build a $55 billion chip factory in the U.S.
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