Tesla May Be Worth $8 Trillion, Double NVIDIA
Famous tech analyst Gene Munster suggests that Tesla could be worth $8.5 trillion in ten years if Elon Musk's new compensation package reaches $1 trillion. This valuation would exceed NVIDIA's current market value. Munster expresses skepticism about Musk's ambitious projects, including transforming Tesla into a robotics company and achieving fully self-driving vehicles. He believes a potential collaboration between Tesla and Musk's xAI could significantly impact Tesla's market cap, although he does not consider this outcome likely.
Famous tech analyst Gene Munster, did some simple math. If a new compensation package for founder and CEO Elon Musk can hit $1 trillion over the course of 10 years, Tesla (NASDAQ: TSLA) will be worth $8.5 trillion in the tenth year. That is more than twice NVIDIA’s (NASDAQ: NVDA) current market value, and eight times what Tesla’s is today.
Among the reasons Munster ran the numbers is that part of Musk’s longer-term comp is tied to market cap. If there is no $8.5 trillion market cap, there is no $1 trillion compensation. Musk’s pay package has other factors, but none tops the market cap yardstick.
Munster is skeptical about whether Musk’s most important projects will be overwhelming successes. One is to transform Tesla into a robotics company. Muck’s name for the robot is Optimus. It will be built as a “robotics humanoid.” It will be able to handle most basic human tasks completely, and could be used by hundreds of millions of people. One hurdle is what people will have to buy. Another is the project’s execution. And, as is true with some other Tesla products, it will have competition.
Another decision could drive up Tesla’s value. This would be a transaction between Tesla and Musk’s xAI business. xIA is a race with OpenAI and the AI efforts by the world’s largest tech companies. And the transaction could be complex. It could be a buyout, a license, or a new company that would own parts of both xAI and Tesla. Shareholders of each might have objections.
Finally, Tesla says it will win the race for a fully self-driving vehicle, which does not require the occupants to operate it at all. These have not been approved for use commercially. There are tests in several cities, and they often compete directly with Google’s Waymo. The hurdles to this plan are that most approvals are at the city level. And, the Tesla product will not be the only one in the field.
Munster thinks the best chance for a sharp rise in market cap is a combination of xAI and Tesla. “Tesla can leverage xAI’s research to help build its physical AI models,” Munster writes. However, he does not handicap this as a likely conclusion.
The post Tesla May Be Worth $8 Trillion, Double NVIDIA appeared first on 24/7 Wall St..
