The Future Fund‘s Gary Black said Sunday that Tesla Inc.‘s (NASDAQ:TSLA) bulls are misreading how Wall Street actually values the company’s robotaxi business, pushing back against an argument that a sharp repricing is inevitable once the unit’s earnings become “undeniable.”
‘You’ve Never Been a Wall Street Analyst’
“Jo, respectfully, you’ve never been a Wall Street analyst,” Black said in a post on X, responding to a user, Jo Bhakdi, who argued that analysts don’t wait for robotaxi cash to “land” before adjusting price targets, since equity research is built on next year’s earnings, not trailing results.
“WS analysts forecast valuations based on their projections of forward earnings and cash flows, not based on where the first real number prints,” Black added.
He said Wall Street assumes Tesla will achieve unsupervised autonomy “at about the same time as a handful of others,” making the technology “quickly become a commodity” rather than a Tesla-exclusive edge.
Alphabet Inc.‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) Waymo currently leads the market with more than 500,000 fully autonomous rides per week, well ahead of Tesla and Amazon.com, Inc. (NASDAQ:AMZN)-backed Zoox, and has recently unveiled its own custom-designed robotaxi chip to further scale its operations.
A Parallel to Tesla’s EV Forecasts
Black compared the current debate to a dispute five years ago, when some retail investors projected Tesla would sell 20 million EVs annually by 2030, implying a 20% share of the global EV market, an assumption he called “preposterous” at the time.
“WS analysts have lower price targets on TSLA than TSLA enthusiasts because WS analysts assume a far more realistic TSLA market share of unsupervised autonomous ride hailing,” Black said.
The Business Behind the Debate
Tesla doesn’t separately disclose robotaxi revenue, but its Services and Other segment, which includes vehicle servicing, Supercharging and FSD subscriptions, grew 50.4% year-over-year in the second quarter to $4.58 billion, outpacing every other part of the business.
Its Texas robotaxi fleet has grown to 175 vehicles, with Miami added as a fifth market in July.
Price Action: The stock closed 1.71% lower on Friday at $348.75 and fell 0.18% in extended trading.
So far this year, Tesla’s shares have fallen 20.39% and are up 5.89% over the past year.
Benzinga edge rankings show Tesla’s stock has a Momentum score in the 13th percentile and a Growth score in the 41st percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: Tada Images on Shutterstock.com
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