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Craig Irwin, Roth Capital senior research analyst, said in a recent program on CNBC that Tesla Inc (NASDAQ:TSLA) has “lots of room to run” because of its auto business, robo taxis and other catalysts. Here is how the analyst made his case for the company:
“The reason they’re beating this quarter is because the federal EV tax credit is going away, right? There’s a small pull forward of demand, and then everybody else has been building these compliance businesses and these businesses to actually grab the subsidies instead of doing what Elon Musk is doing — building a great company, right? All those guys are retreating from the market. So the market’s going to mix towards Tesla over the next several quarters,” Irwin said.
The analyst said people “don’t care” if robotaxis are delayed and argued that Tesla Inc (NASDAQ:TSLA) is better than Alphabet’s Waymo.
“Waymo got three monkeys in the back seat. Let’s talk about tele-operation engineers — three drivers, not one. Tesla’s going to do better than that. Right. So the potential for a trillion-dollar valuation around the robo taxi business is huge. People will discount that out. Elon is back. He’s in the saddle. He’s a wildly creative guy, free thinker, which was held against him for a little while. But you know what? He is an alchemist, and this stock’s going to work.”
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Can Musk really solve all of Tesla’s long-term issues? Tesla’s recently reported strong Q3 deliveries, as expected, amid a temporary boost due to pull-forward demand as a result of the end of EV tax credits. Tesla’s latest announcement of cheap models failed to impress the market. It also shows Tesla is losing pricing power amid intense competition. Cheaper models are also expected to negatively impact its auto margins. In Europe, the new budget models will face intense competition from European and Chinese brands, which are already offering some models under or near $30,000.
In 2024, Tesla’s global deliveries fell for the first time, while the company is expected to see another 10% this year, Reuters reported. China’s BYD recently reported a whopping 800% increase in UK sales, and the company is beating Tesla in most of Europe.
Baron Focused Growth Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2025 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles (EVs), solar products, and energy storage solutions, while also developing advanced real-world AI technologies. Despite ongoing macroeconomic challenges and regulatory complexities, shares climbed after Tesla completed a limited commercial rollout of its highly anticipated robotaxi business in Austin—following more than a decade of development and billions of dollars in investment. This milestone signals a potentially transformative shift in the automotive industry and opens up a sizable new market beyond the company’s core operations. Investor sentiment also improved after Elon Musk stepped back from government-related engagements, boosting confidence in Tesla’s near-term execution. Tesla introduced a refreshed Model Y globally, featuring design and performance upgrades, and outlined plans to unveil new mass-market models starting next quarter. Meanwhile, the company is progressing toward scaling production of its humanoid robot, adding another dimension to its long-term growth story.”
While we acknowledge the risk and potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.