Electric vehicle giant Tesla (TSLA) is getting battered these days. Share prices are in decline, product lines are getting pared back, and concerns are mounting over the future fate of Tesla’s key markets. But one product in particular could be a winner for Tesla: the Semi. Investors seem skeptical, though, based on the over 3% loss in Tesla shares seen in Tuesday afternoon’s trading.
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New trading tool for TSLA bearsTesla skeptics are concerned that the Semi may just be another Cybertruck in the making. The Cybertruck has not performed well since its appearance, and Tesla does not need another expensive failure right now. However, the biggest difference between these two—a difference that makes comparisons largely impossible—lies in their use cases.
The Cybertruck is basically another commuter car, reports note, like the Model 3 and Model Y. But the Semi targets a fundamentally different market altogether. As executive director of the North American Council for Freight Efficiency Mike Roeth noted, “You buy a car out of emotion. You buy a truck on what it can do for your business.” And that distinction gives the Semi—with its remarkable range and high performance—a potential edge in a much more limited field. There are only so many electric big rigs out there. The Semi could be a huge win for Tesla.
Chip Future
Tesla’s branch in to semiconductors also caught a lot of attention, and the reasoning behind it is actually quite sound. Tesla—along with SpaceX and xAI—cannot get the chips they need from the market. That is not surprising, as demand for chips is brisk and there are only so many companies that make them. Therefore, Tesla will make its own chips.
Yet some wonder if this move is perhaps a bad idea after all. A single 2nm chip fabricator will cost between $25 billion and $35 billion to build, and it will take around 38 months to do the job. By the time Tesla puts that huge pile of money in to work on the problem, and actually completes the construction process, who knows what the chip market will look like? The shortages may be out of the picture by then. And with Tesla already looking at capex over $20 billion, at a time when electric vehicle sales are faltering, Tesla’s cash supply may run thin.
Is Tesla a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 11 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 59.03% rally in its share price over the past year, the average TSLA price target of $393.97 per share implies 15.34% upside potential.
