On August 30th, according to Cailian Press, William Blair, the American multinational independent investment bank and financial services company, stated that Tesla's stock is worth buying because it has built an 'Apple-like' energy ecosystem. With the company's declining sales and a series of doubts surrounding Musk, Tesla's stock price has plummeted about 17% this year.

On Thursday (29th), Jed Dorsheimer, an analyst at William Blair, rated Tesla as 'outperforming the large cap' and stated that its energy business is 'undervalued' as data centers drive the growing demand for electrical utilities and the rise of renewable energy.

'We believe that Tesla Energy is the most underestimated part of the Tesla story, and given the recent moderation in expectations for electric cars, we expect the narrative to shift towards the energy storage business,' he explained.

The three key drivers of Tesla's energy storage business include data center construction, efforts to stabilize the US power grid, and the integration of renewable energy.

Dorsheimer said, 'Combining the automotive business with long-term opportunities such as artificial intelligence, autonomous taxis, and robots, we believe that Tesla is the technological leader in the future energy field, with an 'Apple-like' ecosystem.'

For a long time, Tesla's products have been compared to those of Apple, with its cars sometimes referred to as 'iPhones on wheels'.

However, William Blair's focus on Tesla's research is its energy business, which includes solar panels, charging stations, and battery packs for residential and utility companies.

Dorsheimer estimates that by 2028, Tesla's energy business could achieve a compound annual growth rate of 50%, increasing its revenue contribution from 6% to 25%, doubling it.

"We believe Tesla's Megapack is the independent leader in the energy storage field and we believe it will capture a significant market share in these areas," he added.

According to this report, Tesla's Megapack could become the company's fastest growing business, with higher profit margins compared to its electric vehicle business. Megapack is a large rechargeable battery network that provides energy storage capabilities for utility and large commercial projects.

Dorsheimer said, "Our analysis predicts that Megapack will be Tesla's fastest growing product and will significantly increase earnings per share from $0.14 in 2024 to $2.35 in 2028."

However, not everyone is as optimistic about Tesla. For example, prominent Tesla investor and CEO of Gerber Kawasaki Wealth Investment Management, Ross Gerber, recently stated that he has sold about half of his stake in the automaker because no one is interested in buying the company's cars or robots.

"I am concerned that Tesla's heyday is behind us. Over time, I have been reducing my position because I am not confident in Tesla's ability to achieve the sales goals set a few years ago, or even recently," he said.

Overall, William Blair has not set a target price for Tesla, but states that its premium valuation is reasonable.

We believe that the halo effect created by Musk, the company's first-principle culture, and the technological advantage it has established guarantee its significant valuation premium," Dorsheimer said.

Editor/Lambor