The Tesla Selloff.

Quick Overview

The speaker argues that Tesla stock is currently overvalued due to short-term trade momentum and the failure to deliver on ambitious FSD/robotaxi timelines, suggesting that investors should wait for a pullback toward $350 or $340 before buying long-term, despite acknowledging Tesla's superior software and eventual robotaxi distribution potential.

Key Points: Tesla stock experienced a significant selloff, with the speaker anticipating a drop toward the $350 or $340 range due to traders taking profits. The speaker believes the current valuation is too high because the market is overvaluing Tesla's FSD/robotaxi potential, citing Elon Musk's denial of a $15 billion funding round for xAI as an example of Musk managing narratives. The speaker highlights that Waymo has achieved 100M+ fully autonomous miles compared to Tesla's 1.25M+ miles with human safety monitors, indicating a significant lead for Waymo in real-world deployment. The speaker notes that Tesla's robotaxi rollout is suffering from a lack of distribution and that the company is still primarily focused on four-seat vehicles, not the robotaxi model. Despite short-term bearish sentiment due to valuation and macro factors, the speaker remains a long-term bull on Tesla due to its superior software technology compared to competitors like Cruise, Waymo, and Google. The speaker sold some Tesla stock around $450 and set an alert for $400 to potentially buy back in, believing the stock is currently priced for perfection.

Context: The video features the speaker, an investor, reacting to a recent selloff in Tesla stock (TSLA) following news about Elon Musk's AI company, xAI, raising funding and the ongoing development of Tesla's Full Self-Driving (FSD) and robotaxi capabilities. The speaker uses a self-created Tesla spreadsheet model to analyze the current price against future expectations, comparing Tesla's FSD progress unfavorably against competitors like Waymo.

Detailed Analysis

The speaker begins by noting that Tesla stock is currently declining, with traders likely taking profits near all-time highs, anticipating a drop toward $350 or $340. He argues that the current price action is driven by short-term traders exiting positions due to macro concerns (like government nervousness around data) rather than a fundamental shift against Tesla itself. The speaker then contrasts Tesla's robotaxi progress with Waymo's, showing a graphic where Waymo has achieved over 100 million fully autonomous miles, while Tesla has only 1.25 million miles with human safety monitors, suggesting Tesla is significantly behind in real-world testing. The speaker also references Elon Musk's denial of a $15 billion funding round for his AI company, xAI, as an example of Musk managing narratives, suggesting xAI might be raising even more money privately, which is less favorable for retail investors than a public offering. Despite short-term bearish technicals and valuation concerns (like a high P/E ratio of 315 in his model), the speaker remains a long-term bull on Tesla because of its superior software technology, which he believes will eventually outperform competitors like Waymo and Cruise in the robotaxi space, especially since Tesla's distribution model is inherently superior to relying on human drivers for supervision. He concludes by saying he sold some stock around $450 and would look to buy more on a dip.