Important points
Tesla is set to unveil its long-awaited robotaxi on Thursday, but some analysts are skeptical. Meanwhile, Elon Musk’s EV company has returned to being the most shorted stock in the US. Weak fundamentals and discounting measures are at the top of analysts’ list of concerns.
The Tesla (TSLA) bull is in robotaxi fever. Shorts will definitely disappoint.
As the EV giant prepares to unveil its robotaxi at a highly anticipated event on Thursday, the company has found another way to grab headlines: Elon Musk’s company was once named the most shorted stock in the US returned to his position. Wells Fargo’s latest trading ideas include an underweight call and skepticism about whether Robotaxis will deliver on bulls’ predictions.
Elon Musk’s EV company became the most shorted large-cap stock in the Americas in September, returning to the position it held until July, according to data and tech firm Hazeltree.
Excitement around robotaxis could push the stock higher, but as EV demand cools, investor interest in the company, whose stock has largely recovered from the losses experienced in the first half of this year, will wane.
Tesla stock has risen 40% since Musk announced his robotaxi plan.
Tesla shares have risen more than 40% since April 5, when Musk announced plans for the robotaxi event, and have continued to rise even after the event was postponed.
However, Wells Fargo analyst Colin Langan has a price target for Tesla of $120, half the current price, in the bank’s list of tactical trading ideas for the fourth quarter. Langan wrote that he was skeptical that Wednesday’s events would “match Tesla bulls’ high expectations and cause investors to focus on weakening fundamentals.”
These fundamentals include expectations for slower growth in deliveries as demand for EVs declines, and limited potential for discounts to boost sales. He also said that while Musk has been promising robotaxis “by the end of the year…for years,” “experts say the technology is years away and that TSLA’s self-driving technology is “There are significant safety concerns,” he said.
Tesla stock fell even though last week’s delivery numbers were better than expected. Analysts said investors may have been hoping Tesla would deliver a stronger quarter. Tesla announced Wednesday that its third-quarter financial results will be released after the market closes on Oct. 23.
