“We, Robot” from Tesla lets down investors … why Luke Lango remains bullish on AV stocks … where Louis Navellier is shopping for “20-fold growth”
“Disappointing.”
That’s one of the words our technology expert Luke Lango used to describe Tesla’s “We, Robot” event that took place last Thursday.
Now, I’ll state up front that Luke remains incredibly excited about Tesla’s overall vision, and the disappointment in no way diminishes the enormous potential of autonomous vehicles (AV) and automation in general.
The disappointment relates to one thing…
Lack of specifics.
Before we get to that, let’s recap what happened at last Thursday’s “We, Robot” event.
Impressive on a macro level, vague on a micro level
As we expected, Tesla unveiled its Cybercab (2-seater) and Robovan (20-seater), both without steering wheels or pedals. They resemble Cybertruck’s design.
Tesla CEO Elon Musk suggested the Cybercab should launch before 2027 with a price tag around $30,000. He provided no date for the Robovan.
Turning to full self-driving (FSD) technology, we learned that unsupervised FSD is expected in Texas and California by 2025 for current Tesla cars, pending regulatory approval.
Finally, there was Tesla’s “Optimus” robot, of which Musk said, “This will be the biggest product ever—of any kind.”
Multiple Optimus units interacted with the crowd, pouring drinks, playing games, dancing, and speaking, etc. Impressive as it was, no timeline was provided for its commercial rollout.
As to what to make of “We, Robot,” here’s Luke:
Overall, we walked away from the event with mixed feelings.
We thought the Robotaxi event was simultaneously really cool and really confusing, with conflicting short- and long-term implications.
In the short term, the event was disappointing due to its lack of details. In the long term, however, it was bullish due to the exciting vision shared (and Elon’s track record of turning his big visions into realities).
Luke identified some important inconsistencies. For example, the Cybercab will reportedly cost less than $30,000, but Tesla is still struggling to make a non-autonomous car for less than $30,000. How does that work?
As to the Cybercab’s production, Musk provided no discussion of what’s being done right now to prep for a 2027 rollout. Couple that with Musk’s history of being too optimistic on timelines, and Luke believes 2028/2029 is more likely.
Finally, Musk said that Tesla expects to roll out unsupervised FSD on current Tesla cars in 2025 in Texas and California, pending regulatory approval. But then he provided zero updates about how the regulatory approval process was proceeding. “Exciting but vague” is perhaps the best way to sum up the event.
So, what are the immediate investment implications?
Luke says that there are three takeaways. Here he is with the first one and second ones:
It’s positive for UBER, GOOGL, and other robotaxi competitors.
It became clear that Tesla will not be ready to launch and scale a robotaxi service on par with what Waymo and Uber are doing for at least another few years and likely not before 2030.
Therefore, “We, Robot” seemed to confirm Waymo as the robotaxi industry leader for now, creating a tailwind for its owner, Alphabet (GOOGL), and its main partner Uber (UBER).
It’s a short-term negative for TSLA. Tesla stock rallied quite a bit going into this event on the idea that Elon would provide concrete details on his execution plan for scaling a robotaxi service, but the event was light on details. As such, investors will likely sell the stock as they have more questions than answers right now.
The following chart sums up Luke’s analysis visually. Here’s Uber’s (on top) and Tesla’s (on bottom) stock performance since last Thursday.
Long-term, TSLA remains one of Luke’s top picks on automation. So, if it’s been on your watchlist, pay attention to today’s “10% off” sale.
For Luke’s third and final investment implication, last week’s event was bullish for lidar/radar stocks. Musk didn’t detail specs for the Cybercab or Robovan or provide any convincing evidence of Tesla’s vision-only approach to autonomy. This means multiple sensors – including lidar and radar – will likely remain necessary to achieve fully safe autonomy and equally necessary to gain regulatory approval.
Overall, here’s Luke’s bottom line:
We remain very bullish on the autonomous vehicle revolution going mainstream in 2025-2026. While the robotaxi event lacked details, it did show the world that self-driving cars have arrived.
Meanwhile, Waymo will be operating in five cities by early 2025, and Aurora and others will be operating autonomous trucks in Arizona and Texas by then. The developments in this industry remain very encouraging.
We therefore remain very bullish on AV stocks.
One quick note before we move on…
We’d be foolish to bet against Musk. If you missed it, over the weekend, his company SpaceX did something we’ve never seen before…
Here’s Space.com:
The biggest and most powerful rocket ever built took to the skies again. And this time, it came back.
SpaceX [returned] Starship’s huge first-stage booster, known as Super Heavy, directly to its launch mount, catching it with the “chopstick” arms of the launch tower in a bold and unprecedented maneuver…
“This is a day for the engineering history books,” Kate Tice, SpaceX manager of Quality Systems Engineering, said during live commentary as SpaceX employees screamed and cheered at the company’s Hawthorne, California headquarters behind her.
“This is absolutely insane! On the first-ever attempt, we have successfully caught the Super Heavy booster back at the launch tower.”
Bottom line: Don’t bet against Musk…which means don’t bet against AV automation technology.
Speaking of automation and AI, let’s circle back to legendary investor Louis Navellier
Longtime Digest readers know that Louis is an AI bull. He put his subscribers in Nvidia back in 2019. They’re sitting on 3,206% gains as I write.
As we look at AI investing today, Louis still loves Nvidia. He believes it will continue to be the preeminent chip leader as AI continues spreading across the global economy.
However, if you’re looking for the next 3,000%+ AI winner, you’re going to need to search elsewhere. After all, Nvidia is now the second largest company in the world, poised to take the title from Apple. Mathematically, another 3,000%+ surge from its $3.3 trillion market cap is going to be tough to achieve anytime soon.
So, where’s Louis looking then?
At tomorrow’s Nvidias that are quietly growing over in the small-cap space.
Here’s Louis, discussing this “second generation” of AI leaders:
Right now, the market is still focused on the old story of first-generation AI – the chipmakers and ChatGPT and other new AI apps being rolled out by Big Tech. And don’t get me wrong, as impressive as they are, if there’s one lesson we can learn from the dot-com era, it’s that this is not where the big money will be made.
The reality is this is just the beginning of the story. Just as the second generation of tech stocks after the dot-com era went on to run laps around the first-generation group of tech stocks, we’ll see the same thing happen with AI.
This will be the Real AI Boom. This Real AI Boom will involve companies that use generative AI or reinvent or automate some of the oldest business models around.
As we noted in yesterday’s Digest, Louis just released research on his findings. This is a market that’s expected to grow 20-fold to a whopping $15.7 trillion by 2030. That’s almost the size of China’s entire national output.
I’ll give Louis our final word today:
I believe the next generation of AI will be the real AI Boom.
It’s been 25 years since we’ve seen a crowd-fueled stock market boom truly comparable to this one, with the rise of the internet in the late ’90s.
If you’re over 50, this could be the last financial mania of our lifetimes, so the time to invest is now.
Have a good evening,
Jeff Remsburg
