A confession of bullish bias up front, from April 24's "Tesla Q1 2024 Earnings Call Transcript (TSLA)":
In pre-market action the stock is up $17.47 (+12.07%) at $162.15.
Below are the words that are adding billions ($50+) to the company's valuation.
Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....
More from that post after the jump.
From ZeroHedge (who, as far as I can tell are not fans of electric vehicles or Tesla), June 26:
Morgan Stanley's Adam Jonas Says Tesla "May Hold Important Cards" In The Next AI Trade
Morgan Stanley's Adam Jonas suggests that Tesla could be poised for the powering up America theme with its solar energy and storage business. This comes as artificial intelligence data centers are being constructed across the country, and once completed, demand a whole heck of a lot more power than traditional data centers, which means power grids must be upgraded to handle the new load capacity.
"At first glance, the rapid growth in AI and its impact on electricity demand may not seem to have relevance to Tesla or the broader auto industry," Jonas wrote in a note to clients on Monday.
Titled "Tesla Energy Storage: Can GenAI Electrify This $130bn Business?" Jonas continued, "We recently published an analysis showing how US data center power usage may be equivalent to the power used by 150 million electric cars by 2030; the forecasted increase in US data center power from 2023 through 2027 is the electrical energy equivalent to adding 59 million EVs to US roads, or a 21% increase in total vehicles in service."
The analyst then describes how Tesla's energy generation (solar) and storage (Powerwall/Megapack) "may hold some important cards in the evolution of the US grid as energy usage of compute/data grows."
Jonas seems to embrace 'The Next AI Trade,' a theme we introduced to our pro subscribers in early April. We outlined how the AI revolution will drive a significant increase in electricity demand from AI data centers, reshoring trends, and other electrification trends, necessitating an upgrade of the nation's grid.
Here are some key points from Jonas' note, which explains Tesla Energy will play a critical part in upgrading the nation's power grid for the AI revolution, which justifies a $310 price target:
Tesla Energy Valuation and Forecasts:
Tesla Energy is valued at $36 per share, contributing significantly to Tesla's overall market cap.
Revenue projections for Tesla Energy in FY24 are over $7 billion, with margins expected to surpass those of Tesla's auto business by next year.
EPS contributions from Tesla Energy are estimated to reach $0.50 by 2026 and over $1 by 2030.
Impact of AI on Energy Demand:
AI acceleration is expected to spur a significant increase in energy demand, likened to the power usage of 150 million electric cars by 2030.
Data center power usage is projected to increase substantially, equating to the energy addition of millions of EVs on US roads.
Tesla's Energy Products: Powerwall:
A 13.5 kWh lithium-ion battery pack for residential use, capable of storing solar or grid energy and providing power during outages. Solar Panels and Solar Roof:
Solar solutions for residential customers, with the Solar Roof integrating solar tiles directly into the roof structure.
Megapack: A large-scale battery storage solution for commercial and utility use, designed for easy installation and high energy density.
Tesla Energy's Strategic Advantages:
Tesla's capability in distributed energy generation (solar) and storage positions it to benefit from increasing energy demands driven by AI and data centers.
Innovations and scale in the energy storage market make Tesla a disruptive force against incumbent players.
Case Studies and Global Deployments:
Various case studies highlight Tesla Energy's successful deployments, such as emergency backup systems for railways, energy savings for breweries, and large-scale renewable energy storage projects.
Tesla's global footprint includes numerous installations across residential, commercial, and utility sectors.
Future Prospects and Challenges:
The report outlines a bull, base, and bear case for Tesla Energy, with varying revenue growth and margin expectations.
The storage business is expected to grow at a faster rate than the solar business, with significant contributions to Tesla's overall profitability by 2030.
Tesla faces competition from other storage and solar companies but is positioned well due to its innovative products and integrated business model....
....MUCH MORE
The stock is up $5.00 (+2.67%) at $192.35 and though impressive it is not yet enough to confidently say BREAKOUT!
From June 20:
....Until TSLA decisively breaks through the resistance line, roughly $190—195 the post from January 25 is still operative:
Tesla Roundup: Dead Money For, At Minimum, A Couple Quarters (TSLA)Currently changing hands at $184.86, down $2.58 (-1.38%)
In late pre-market action the stock is down $18.03 (-8.68%) at $189.80....
And back to the Q1 transcript:
....[Operator Instructions] But before we jump into Q&A, Elon has some opening remarks. Elon?
Elon MuskChief Executive Officer at TeslaThanks, Martin. To recap, in Q1, we navigated several unforeseen challenges as well as the ramp of the updated Model 3 in Fremont. As we all have seen, the EV adoption rate globally is under pressure and a lot of other auto manufacturers are pulling back on EVs and pursuing plug-in hybrids instead. We believe this is not the right strategy and electric vehicles will ultimately dominate the market. Despite these challenges, the Tesla team did a great job executing in a tough environment and energy storage deployments of Megapack, in particular, reached an all-time high in Q1 leading to record profitability for the energy business. And that looks likely to continue to increase in the quarters and years ahead. It will increase.
We actually know it will, so significantly faster than the car business as we expected....
As we said in a January 2023 post:
One of the more interesting bits in the 8K filing (and slide deck) was "Energy Storage" up 152% year-over-year in Q4. Elon is successfully building an entire new business inside of Tesla.
The "successfully" was underlined in the original.
Related:
January 12 - "(Big) Batteries: "‘World leading' Tesla battery online to help kick coal out of Hawaii" (TSLA)"
May 30 - "Tesla Appointed Supplier To Giant RWE Battery Electric Storage System"
Also in January "Deep Dive: Iron Batteries Crushed The Demand For Cobalt, Reduced The Demand For Nickel"
And then the whole infrastructure series:
The Infrastructure Theme Is For Real (PWR)
January 31:"KKR raises $6.4 bln for its Asian infrastructure fund" (KKR)
January 8 "East
Coast land continues to collapse at a worrying rate It's steadily
sinking or subsiding, which is destabilizing levees, roads, and
airports."
January 8: "There’s a Shortage of Electrical Wires, Transformers. That’s Good for These Stocks."
January 12: (Big) Batteries: "‘World leading' Tesla battery online to help kick coal out of Hawaii" (TSLA)
January 12: BlackRock Goes Large-by-Large In Infrastructure (BLK)"
January 15: "Investors look set to pour cash into infrastructure following BlackRock acquisition" (BLK)
January 16: "BlackRock Acquisition Triples Its Business of Building Airports, Roads, and Utilities"
I'm
telling ya, this is a big deal. Not just for the $12.5 billion purchase
price but for the $100+ billion in assets that GIP manages.
January 23: Minerals-for-Infrastructure: "Congo and China Talking $7 Billion In Finance, Tshisekedi Says"
January 23: DEI and ESG Live On, We Just Won't Talk About Them (BLK)
That's one lesson from BlackRock's purchase of Global Infrastructure Partners.
January 29: RAND: "The U.S. Must Close the Long-Distance Power Transmission Gap with China"Or, as the Financial Times put it, a bit more succinctly, February 1, 2024:
KKR has raised a record $6.4bn for its latest Asian infrastructure fund, capping a month of frenzied investment activity in the sector at a time when broader private equity fundraising has slowed.Related, December 4, 2023:
—KKR raises record $6.4bn for Asia fund in infrastructure rush
Russell Napier Called It: "The Eyepopping Factory Construction Boom in the US"