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Tesla analysts react to the approval of Elon Musk’s salary package
Tesla (TSLA) shareholders reapproved Elon Musk’s record salary pacteliminating a large glut in the stock as investors blessed the controversial compensation plan.
Tesla shares rose the day before how Musk practically said payment plan approval it was a fait accompli. And with 72% of shareholder votes (excluding Musk and his brother Kimbal) in favor From the $56 billion compensation package, analysts believe the clouds surrounding Musk’s future and the company’s leadership have lifted.
“There’s an old saying in Silicon Valley: ‘Don’t fire Steve Jobs.’ When someone truly brilliant comes along and chooses to run a company, any sensible investor should do everything in their power to keep them,” Nick Colas of DataTrek wrote in a note Friday morning.
Colas, who started working as an analyst covering Detroit’s Big Three automakers, noted that Open AI broke the rule when its board fired Sam Altman late last year.
“Tesla shareholders did not make the same mistake,” Colas said.
Longtime Tesla bull Dan Ives said it was a “pop-the-champagne” moment for Tesla and Musk, with the company now focused on execution.
“This eliminates a $20 to $25 excess in the stock, in our view, that has been weighing on the stock since the Delaware ruling kicked off this Twilight Zone soap opera earlier this year,” Ives wrote in a note on Thursday night. “Our bullish scenario right now is $350 over the next 12 to 18 months as we believe in the next chapter of Tesla’s growth story around autonomous vehicles and FSD. [full self-driving] is now on the short-term horizon set to take Tesla’s valuation north of $1 trillion by 2025, in our view.”
CFRA analyst Garrett Nelson also expressed relief in a note Thursday night. “We believe the news takes off the table a potentially disastrous scenario in which Musk could have potentially left Tesla and chosen to devote more time to his other (non-public) companies, which could have triggered a talent ‘brain drain’ top. and had huge implications for the company’s future (and TSLA’s stock price).”
Musk lays out his vision
Elon Musk at Tesla’s 2024 shareholder meeting in Austin, Texas. (Screenshot: Tesla YouTube stream) (Tesla YouTube stream)
Musk took the stage and gave a presentation after the changes were approved and revealed a list of products and ambitious goals.
“If I wasn’t optimistic, this factory wouldn’t exist,” Musk said during the presentation, which took place at Tesla’s headquarters in Austin, Texas. “I have been pathologically optimistic since birth. But this is the reason why all this is happening. But, I deliver in the end. That’s what’s important.”
With the upcoming Tesla robotaxi, Musk said some vehicles in the fleet would be owned by Tesla, while others would be owned by customers. Tesla owners would have something similar to “Airbnb” functionality with their cars, Musk said, giving them control over the timing of their vehicles and the frequency of participation in the robotaxi network.
The story continues
Research firms like Cathie Wood’s ARK Invest see robotaxis as the main driver of the company’s $2,600 long-term price target.
“ARK estimates that nearly 90% of Tesla’s enterprise value and profits will be attributed to the robotaxi business by 2029,” ARK analyst Tasha Keeney wrote in a note. “Meanwhile, electric vehicles could approach a quarter of total sales and around 10% of Tesla’s earnings potential, as we believe the robotaxi business will have much higher margins.”
Tesla’s robotaxi reveal event is scheduled for August 8th.
Visitors view Tesla Bot’s humanoid robot “Optimus” at the 2023 World Artificial Intelligence Conference in Shanghai, China, July 6, 2023. (CFOTO/Future Publishing via Getty Images) (CFOTO via Getty Images)
As for Tesla’s Optimus robot, Musk had more ambitious plans for its launch. Musk said limited production of robots would take place this year and that Tesla itself would have “a few thousand” robots working in Tesla factories next year. This is despite the fact that Optimus has only recently been seen in some demonstration videos released by Tesla.
“I think Optimus has a $25 trillion market cap situation; It’s a lot of work to get there, but we’re moving very quickly on that path,” said Musk.
The combination of robotaxis, Optimus and autonomy are part of Musk’s AI-driven focus on Tesla – which Musk believes is the true way to see Tesla as a company.
“We are not just beginning a new chapter for Tesla; we are starting a new book”, said Musk about AI and its importance for Tesla
“What is the new book about? AI/robotics: autonomous driving and Optimus,” wrote Canaccord Genuity analyst George Gianarikas on Thursday evening.
“I could argue [Tesla] It’s one of the best AI plays on the market when you look at the next two, three, four years,” Wedbush’s Ives added in an interview with Yahoo Finance.
Tesla’s product roadmap in its 2024 shareholder meeting presentation. (Tesla) (Tesla)
Adding further to Tesla’s story and future growth, Musk revealed in a slide during the presentation that three new Tesla vehicles are planned for the future. Two of them, probably the robotaxi and the cheapest Tesla vehicle, were mentioned by Tesla as being in preparationbut a new van-like product also appears under a sheet.
On a slightly negative note for investors, Musk confirmed that near-term demand and sales will still struggle as the industry goes through a period of transition.
“It’s tough sledding out there,” Musk said regarding the electric vehicle market, adding that competitors have also been reducing investment and production of electric vehicles.
Pras Subramanian is a reporter for Yahoo Finance. You can follow it Twitter and so on Instagram.
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