New Price Target for Tesla as Blackout Drives Record Print
Alphabet’s Waymo left patrons stranded as Tesla navigated San Francisco’s blackout.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
This past weekend, a substation fire caused a massive power outage in San Francisco, leaving over 130,000 Pacific Gas & Electric (PCG) customers in the dark. As of Monday, crews were still working to restore service to a few thousand consumers.
Also on Monday, shares of Tesla (TSLA) touched $498. It was the highest print ever for the Austin, Texas-based EV, technology and robotics company. Tesla narrowly missed a fresh all-time closing high, coming up short by less than 1%.
During the blackout, traffic lights stopped working. Self-driving vehicles operated by autonomous driving technology company Waymo, which is owned by Alphabet (GOOG) , paused operations. Several recordings circulated online of Waymo vehicles blocking streets and intersections, creating gridlock and making a bad situation worse.
Meanwhile, according to CEO Elon Musk, it was just another day for Tesla’s Robotaxi fleet.
A 60% Gain in 6 Months
We recommended buying Tesla at $285 in June, and added to that position in July, raising our cost basis to about $300. Those buys are now in the black by about 60% in six months.
Looking to the charts, Tesla is struggling to break above resistance, in the form of its previous all-time intraday high (point A), set in December of last year (horizontal black line). The stock’s rising trend line (black diagonal line), which has been intact for most of this year (point B), helps to form a massive ascending triangle pattern.
Tesla’s New Target Price, Praise for FSD
Tesla has now reached our former target price of $480, as explained here. Based on the bullish ascending triangle formation, this stock has earned a new target price of $560.
Tesla’s full self-driving (FSD) technology recently received praise from several analysts, as documented here. Shares of the EV manufacturer have gained about 110% year-to-date.
Bottom Line
Someday, in the not-too-distant future, someone will be telling their great-grandchildren that we used to pilot our cars manually without the aid of self-driving software. The kids will probably think it's a joke.
Did the San Francisco blackout prove that Robotaxi is a superior product compared to Waymo? Not necessarily. Autonomous ride-sharing vehicles are in their infancy, with many upgrades to come. Waymo will survive, but right now, the optics are not great.
Put yourself in the shoes of a person trying to make their way home in a darkened city. You’ve just been stranded by your ride, possibly in an unfamiliar area. You might have second thoughts about using that technology again - especially when an alternative is available.
At the time of publication, Ponsi was long TSLA.
