Canaccord: Tesla can seize 'generational opportunities', reiterates Buy rating

Investing.com -- Canaccord Genuity analysts remain optimistic about Tesla Inc (NASDAQ:TSLA )'s long-term prospects, despite growing skepticism after the company’s recent Robotaxi event.

Investors and analysts voiced concerns following the presentation, which lacked technical details and provided a highly ambitious timeline for the rollout of fully autonomous vehicles.

Canaccord analysts acknowledged these concerns but argue that Tesla’s long-term strategy may pay off, urging investors to take a broader view.

The event, held at Warner Bros. Studios, showcased Tesla's plans for the Robotaxi and a larger Robovan, both designed for autonomous transport.

While the flashy reveal was filled with excitement and entertainment, Canaccord noted the underwhelming specifics.

“Details were minimal. And, we doubt the timing of it all. All. By a lot,” the firm’s analysts wrote.

“Not only is Robotaxi unlikely by 2026 in our view, but, we are not totally convinced that Tesla's camera-only, end-to-end neural network approach is the right one — at least not for a long while.”

Analysts also highlighted that current third-party testing shows Tesla’s Full Self Driving (FSD) technology achieves “a woefully low” 13 miles between interventions.

The report underscores the challenge of making the system profitable, highlighting that for Tesla to justify the significant costs of AI training and hardware—especially with the billions spent on Nvidia (NASDAQ:NVDA ) chipsets—massive scale will be required.

“To justify the back-end cost of Tesla's system and reach cost parity with competing solutions, investors need to see millions of customers opt-in for FSD and Robotaxi,” the note explains.

However, the analysts caution against focusing too much on short-term cynicism, adding that Tesla’s leadership in key growth areas such as electric vehicles (EVs), robotics, AI/autonomy, and energy storage, should not be overlooked.

All of the four industries “have large total addressable markets (TAM) and significant growth — and where Tesla should be among the leaders,” analysts noted.

“We encourage investors to shift their perspective, recognize the prevailing cynicism, and potentially generate enduring value. Tesla is operating in high-potential markets for the long term, many of which have only begun to be explored,” they added.

Canaccord also highlights that Tesla is not alone in recognizing the vast potential in autonomy and robotics. While the company's leadership has faced challenges with timelines in the past, analysts remain confident in Tesla's ability to seize “a set of generational opportunities.”

“Reject cynicism, embrace Optimus-ism; it's realistic to do so,” the firm concluded, reiterating a Buy rating on Tesla stock.

Source: Investing.com