Tesla (TSLA 1.08 %) CEO’s ELON MUSK has a history of optimistic predictions about the company. He still made a bold forecast during a conference with investors in the fourth quarter of 2024 (ending on December 31).
He believes that Tesla may be the most valuable company in the world someday, and is a larger market capitalization than the next five companies. At the time of this writing, the world’s five companies are Apple, NVIDIA, Microsoft, Amazon, and Alphabet, with total value $ 14.7 trillion.
Is Tesla really valuable in the future? According to Musuku, a new $ 10 trillion opportunity may be a secret to reach there, and it has nothing to do with electric vehicles (EVs). Please read more.
Image source: Tesla.
Tesla’s core business is struggling now
It is important to deal with the elephant in the room before jumping into the potential of Tesla. The sales of passenger EVs, the core business, are not so successful. The company delivered 1.78 million cars in 2024 and decreased by 1 % compared to 2023.
This is not good news, given that the sales of passenger EVs still account for almost 79 % of the total revenue of the company.
Until the past, masks predicted the growth of 50 % of the birth as much as possible, but there were a series of issues, such as increasing competition and softening EV demand.
Furthermore, the mask is absolutely convinced that automatic driving cars are in the future, so they are not engaged in racing to the bottom by producing cheaper and inexpensive passenger EVs. I hope to concentrate on the new Cyber Cabro Bota instead.
Cyber cab is completely executed with Tesla’s complete autonomous driving (FSD) software, so it does not come with a pedal or steering wheel. FSD version 13 is available in beta mode, and the owner of the Tesla passenger car can test in the real world in the supervised method. This is the most advanced version so far.
According to the company’s latest vehicle safety report, cars using FSD version 13 crashes on average 59 million miles for typical American drivers who crash once to 700,000 miles on average. I am involved. As a result, the mask believes that FSDs that have not been monitored by Austin, Texas will run in some other cities by the end of 2025.
Autonomous operation can change Tesla’s economics. In addition to selling cars, the company can build large -scale riding networks for cyber cabs. As a result, you can raise your earnings by transporting passengers and completing 24 -hour commercial delivery a day. Cathie Wood’s Ark Investment Management believes that it will be $ 14 trillion by 2027, and analysts in other Wall Streets call it Tesla’s $ trillion.
Opportunity for $ 10 trillion: Optimus
Cybercub’s opportunity may be pale compared to Optimus, a humanoid robot, which is more exciting than any other product in the company’s history. He says that it is probably 1,000 times used than a car. In other words, it can be sold to various markets.
According to the mask, this year, thousands of optimas robots are used in Tesla inside, and they will complete repetitive work that humans do not want to do, such as transporting sheet metal to the welding line. They could ultimately be deployed in countless industries around the world, and they may also be popular at home to execute basic cleaning tasks.
In fact, the mask believes that humanoid robots will surpass humans by 2040. He believes that Tesla will manufacture them at about $ 20,000, and opens the door to less than $ 30,000. The price will probably increase the efficiency of the company, and will decrease over time as competitors enter the market.
The mask proposed several ambitious targets at the fourth quarter call with investors. He believes that the production lamp up can be five times every year, and we believe that it will ultimately reach 100 million years.
In the long run, he says that Optimus can create the north of $ 10 trillion.
Tesla stock is very expensive
If the market capitalization of Tesla is ultimately exceeded the total value of Apple, NVIDIA, Microsoft, Amazon, and Alphabet, the stock price will be about $ 4,660. It means 1,200 % upside from where you are trading today.
The 12x return outlook sounds attractive, but investors need to consider potential risks. Tesla’s profit per share (EPS) was 53 % in 2024, $ 2.04, and the stock price was placed at a price -to -profit ratio of 190.7 (P/E). In other words, stock is much more expensive than Apple, NVIDIA, Microsoft, Amazon, and Alphabet.
PE ratio, data by YCharts.
Tesla shares need to fall 78 % only to trade with the average P/E (40.2) of these five shares. This may face investors who may face investors if MUSK and his team do not make a meaningful progress on platforms such as FSD and Optimus next year.
I think 2025 will be a transition year for the company. Cyber cab is not expected to reach mass production until 2026, and the production of Optimus will probably be more nominal for several years. In fact, the mask is not convinced that this year Tesla will achieve the target of 10,000 humanoids.
In other words, its financial performance will be almost exclusive to the sale of passenger EVs for at least 12 months. Given that they shrunk last year, it makes it even more difficult to make the company’s evaluation even more.
Investors do not recommend jumping into Tesla today, but if so, they must be ready to hold it at least for the next five years.
