Overnight, the US stock market belongs to tesla!

After releasing the market-shaking Q3 earnings, investors' enthusiasm was quickly ignited! Tesla traded unilaterally upwards all day, with its stock price soaring nearly 22%, marking its best single-day performance in 11 years.

At the same time, tesla's total market cap surged by over $154 billion in a single day, equivalent to the combined market cap of 'Volkswagen + BYD,' propelling it back into the top ten of US stock market capitalization.

Wall Street bulls and bears debate.

Although the market highly appreciates tesla's performance, there are still diverging views among Wall Street's major firms about the company's future.

Bank of America analyst John Murphy strongly raised tesla's target price, believing that by 2025, it will be in a favorable position and that tesla will experience a 'second wave of growth'.

Murphy expressed his pleasure at seeing the stronger gross margin in the automotive business, with the gross margins in energy and service businesses (Tesla expects sales to double by 2025) exceeding expectations. Consequently, he raised the target price from $255 to $265 and maintained a buy rating for the company.

Morgan Stanley remains bullish, with Goldman Sachs believing that by 2025, Tesla's electric car annual growth rate will be 14% (2.07 million vehicles), equivalent to a quarterly delivery of approximately 0.51 million to 0.52 million vehicles.

The team believes that in the third quarter, investors are more focused on reducing the cost of autos and improving the profitability of the auto business, rather than trying to assess the value of Tesla's shift towards artificial intelligence and other businesses. Tesla remains Morgan Stanley's "top pick," with a target price of $310.

However, on Wall Street, the most bullish analyst on Tesla is undoubtedly its 'die-hard fan,' Dan Ives, a well-known analyst at the American investment bank Wedbush. Ives stated that the combination of profit margins with Tesla's AI and self-driving products and other growth drivers will ultimately bring a market cap of over a trillion dollars.

He said: 'Now, price cuts have become a thing of the past, for Wall Street, this is a key factor in proving that Tesla will continue to increase profit margins in the coming years as it undergoes the AI/FSD transformation.'

Other Wall Street bigwigs bullish on Tesla include: Deutsche Bank analyst Edison Yu (target price $295), Piper Sandler analyst Alexander Potter (target price $310), and Truist Securities analyst William Stein (target price $238).

Jefferies Financial analyst Ryan Brinkman's views are in stark contrast to theirs. He believes that while investors may be excited about Tesla's exceptional profit growth, the catalysts driving this stock price surge cannot be seen as long-term growth factors.

He specifically mentioned that Tesla's quarterly profit and cash flow had improved, but the driving forces behind them are indeed unsustainable. These include revenue from selling carbon emission credit quotas ("carbon sales") and abnormally high operating capital gains.

"Lucky month" on the way? Tesla's November performance mostly strong

A single day surge of nearly 22% is inevitably causing investors to have a "fear of heights" sentiment, but looking back at history, the upcoming November can be described as tesla's "lucky month". Since its listing in 2010, November has been the second strongest month for tesla's performance, with an average monthly ROI of 9.8% and a 71% chance of stock price increase.

What other factors should investors pay attention to in the future?

• US Presidential Election.

Given that tesla is seen as a potential beneficiary of the "Trump trade", if Trump wins in November, it may have a positive impact on tesla's future trends.

Elon Musk recently promised that before the November election, he will randomly select a lucky person from those who have signed the online petition supporting the U.S. Constitution each day and give them 1 million dollars. This means that before the official U.S. election on November 5th, Musk will provide a total bonus of 17 million dollars to petition signers.

In addition, another conservative super PAC called the Sentinel Action Fund reported receiving 2.3 million dollars from Musk.

According to Bloomberg, Trump mentioned that if he successfully wins re-election, he hopes Musk will join the government. Musk may be involved in the "Department of Government Efficiency" (humorously abbreviated as DOGE), which is also synonymous with the cryptos Musk supports.

• FSD may soon be listed in Europe and China

On September 5th, Tesla AI posted on the social media platform 'X', stating that Tesla plans to launch an advanced driving assistance system called 'Full Self Driving' in China and Europe in the first quarter of next year.

Multiple informed sources revealed that the Chinese government supports Tesla in conducting early trials of some FSD functions while complying with existing laws and regulations, but the approval for FSD introduction into China has not been obtained yet, and the relevant evaluation work is still in progress.

Furthermore, a recent traffic accident involving a Tesla equipped with FSD resulted in a pedestrian fatality, leading the National Highway Traffic Safety Administration (NHTSA) to launch an investigation, which is a risk that investors need to carefully monitor.

• Will the self-driving 'pie' once again fail to materialize?

For the market, Tesla's innovation in autonomous driving technology is definitely among the best. Musk claimed that by 2025, Robotaxis will be introduced in Texas and California, but his previous unfulfilled promises have left the market skeptical.

As early as 2017, he promised to achieve fully autonomous driving from Los Angeles to New York by the end of that year - but obviously failed. In 2019, he predicted that by 2020, 1 million self-driving taxis would be on the road - another promise that became empty words.

Therefore, whether next year's Robotaxi ‘pie’ can be realized will also be a key factor determining its stock price trend.

Jefferies Financial is relatively pessimistic about this. Analysts believe Musk has not provided 'verifiable evidence' of Tesla's progress in autonomous driving technology, and there is currently no precedent for achieving higher levels of autonomous driving using purely visual methods.

However, at the performance conference, Tesla CEO Elon Musk stated that if he were to obtain a potential position in the US government, he would promote a more streamlined regulatory approach to approve the use of fully self-driving cars nationwide. Clearly, Trump's expected victory has also significantly increased the credibility of Robotaxi.

Editor/Lambor