Why do you think the market hasn't priced in Tesla's AI/Optimus/EV-adjacent opportunities? I bought in to TSLA back in 2016, and sold in 2021 feeling $1T squarely priced in all those opportunities x uncertainty/risk.
Personally, I'm waiting to see a cohesive strategy of outsourcing with deeper partnerships before buying back in... ala Amazon "sell everything" philosophy or Apple's IP-heavy/manufacturing-light business.
Good call selling at 1 trillion, considering the situation with interest rates jacking up car payments and slowing down the economy.
Right now Tesla is a fairly priced carmaker. The market hasn’t priced in robotaxi/optimus/dojo because those businesses don’t exist. The ride hailing network doesn’t exist. Dojo as AWS for AI training doesn’t exist. The big one, the factory that produces low cost, useful humanoid workers, also doesn’t exist. The product is the factory.
If the market believed this things were going to happen any time soon Teslas market cap would be multiple trillions.
I don’t actually know how much of the market is even aware of what they’re working on or how valuable it is. If other investors are aware, what are they valuing it at and who’s likely do they think it is to come to fruition?
I think people either aren’t attempting to value it because 1. It’s hard and 2. They consider it low probability of coming to fruition. Even if they do consider these products valuable I think they think it’s not going to happen soon enough to price into the stock.
Good question. It’s interesting to think about why he separated the companies, legally, instead of all in one company. For example, X.ai is separate from X and the others because he wants the governance of the ai to be distributed across humanity. X could certainly take off in terms of valuation, in the long term. But it’s also a private company and Elon has specifically said they don’t need to make a ton of money they just need to not go bankrupt. SpaceX’s mission is to colonize Mars. That’s like, crazy. They’re going to spend all the launch business and starlink profits on that for a long time. I just don’t see the return on investment. SpaceX is like philanthropy in the limit. Neuralink is a weird one and idk how that whole thing plays out it makes me uncomfortable, frankly.
Tesla is Elon’s only public company and is compelled to raise earnings for shareholders. Elon’s compensation package is tied to the market cap. Tesla is like his cash cow to do things like buy Twitter.
In short, building a city on mars is not profitable but developing AI tech super fast on earth is hyper profitable.
Why do you think the market hasn't priced in Tesla's AI/Optimus/EV-adjacent opportunities? I bought in to TSLA back in 2016, and sold in 2021 feeling $1T squarely priced in all those opportunities x uncertainty/risk.
Personally, I'm waiting to see a cohesive strategy of outsourcing with deeper partnerships before buying back in... ala Amazon "sell everything" philosophy or Apple's IP-heavy/manufacturing-light business.
Good call selling at 1 trillion, considering the situation with interest rates jacking up car payments and slowing down the economy.
Right now Tesla is a fairly priced carmaker. The market hasn’t priced in robotaxi/optimus/dojo because those businesses don’t exist. The ride hailing network doesn’t exist. Dojo as AWS for AI training doesn’t exist. The big one, the factory that produces low cost, useful humanoid workers, also doesn’t exist. The product is the factory.
If the market believed this things were going to happen any time soon Teslas market cap would be multiple trillions.
I don’t actually know how much of the market is even aware of what they’re working on or how valuable it is. If other investors are aware, what are they valuing it at and who’s likely do they think it is to come to fruition?
I think people either aren’t attempting to value it because 1. It’s hard and 2. They consider it low probability of coming to fruition. Even if they do consider these products valuable I think they think it’s not going to happen soon enough to price into the stock.
Great essay, Chris! Enjoyed the idea of cross pollination between the companies.
do you think your position would change if any of his other companies really took off (e.g. spacex?)
Good question. It’s interesting to think about why he separated the companies, legally, instead of all in one company. For example, X.ai is separate from X and the others because he wants the governance of the ai to be distributed across humanity. X could certainly take off in terms of valuation, in the long term. But it’s also a private company and Elon has specifically said they don’t need to make a ton of money they just need to not go bankrupt. SpaceX’s mission is to colonize Mars. That’s like, crazy. They’re going to spend all the launch business and starlink profits on that for a long time. I just don’t see the return on investment. SpaceX is like philanthropy in the limit. Neuralink is a weird one and idk how that whole thing plays out it makes me uncomfortable, frankly.
Tesla is Elon’s only public company and is compelled to raise earnings for shareholders. Elon’s compensation package is tied to the market cap. Tesla is like his cash cow to do things like buy Twitter.
In short, building a city on mars is not profitable but developing AI tech super fast on earth is hyper profitable.