Overnight,$Tesla (TSLA.US)$It surged more than 12%, the biggest one-day increase since January 2022. The total market value returned above 500 billion US dollars to reach 515.4 billion US dollars.

Tesla's performance is mixed

On April 24, Beijing time, Tesla announced its financial report for the first quarter of 2024: Tesla Q1 achieved revenue of US$21.301 billion, down 9% year on year; net profit of US$1,129 billion, down 55.07% year on year; delivery volume was 38,6810 vehicles, down nearly 9% year on year. It's easy to see that all the key figures in Tesla's Q1 earnings report fell short of Wall Street analysts' expectations.

However, Musk made a “big reversal” at the results conference, saying that Tesla is still maintaining its promise to start production of “new models” in the second half of 2025. This directly “punched” media reports in early April that Tesla had given up developing the cheap Model 2 (starting price of less than 30,000 US dollars).

According to Musk, the new model is expected to be put into production in the second half of 2025, and the production platform will incorporate some features of the next-generation platform and the platforms currently used to produce the Model 3 and Model Y. He said:

There is no need to build a new plant or large-scale new production line, and the new models will be produced more efficiently on existing production lines.

Musk anticipates that this may increase Tesla's annual production capacity to more than 3 million vehicles. According to many investors, as long as Tesla continues to launch low-cost models, even if the figures in this financial report are not “beautiful” enough, they are beginning to look forward to its future.

Also, Musk said the robot taxi he is developing is progressing very well. He also emphasized that Tesla is an AI robotics company, not a car company.

Musk is also adamant that if anyone thinks Tesla can't solve the problem of autonomous driving, they shouldn't be investors in this company. According to media analysis, Musk downplayed most of the content in the performance report and successfully made investors shift their attention elsewhere.

Wall Street's long and short divisions intensify

Tesla's Q1 earnings report fell short of expectations, but Musk's statement at the performance meeting that he would speed up the launch of cheap models and increase investment in AI gave many investors back their confidence. Wall Street has mixed opinions on this, and many major banks, including Wade Bush, Citibank, and UBS, have updated Tesla's target price.

Specifically, Bank of America upgraded Tesla's stock rating from “neutral” to “buy,” with a target price of 220 US dollars. According to the bank's analyst John Murphy:

A positive catalyst has emerged around Tesla, and previous speculations about stopping development of cheap models have been falsified. If Tesla continues to advance according to several plans announced at the performance conference, there is still plenty of room for the company's stock price to rise in the future.

Additionally, Citi raised its target price for Tesla shares from $180 to $182.

However, Bank of America and Citibank are still in the minority, and many investment banks have chosen to lower their target prices for Tesla. Among them, Wedbush lowered Tesla's target price from $300 to $275. Analyst Dan Ives said:

Musk has launched a new “Model 2.5” concept car, and the sales prospects for this model are not very clear. Furthermore, he pointed out that Tesla's autonomous driving and FSD are a critical long-term strategy, but although they have bright prospects, they have also brought about a series of regulatory and technical challenges, and these problems will gradually become apparent in the next few years.

UBS reaffirmed Tesla's “neutral” rating, but lowered its price target from $160 to $147. Analysts believe:

Although Musk emphasized that Tesla is an AI robot company, not an automobile company, judging from its current stage of artificial intelligence development, the short-term outlook is uncertain.

J.P. Morgan believes that due to the early introduction of cheap models and the promotion of autonomous taxis, Tesla may not be affected by the recent decline in profit expectations, and the decline in stock prices will be reversed in the short term. However, as investors increasingly consider the impact of resetting short-term expectations on long-term growth, Tesla will not be able to maintain its current high valuation for long. J.P. Morgan maintains a low rating for Tesla, with a price target of $115.

Cow friends,

Do you think Tesla's surge is a passing fad or is it the beginning of a bull market?

Welcome to leave a message to discuss in the comments area~

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