Tesla AI Day: An Investor’s Perspective

Key Takeaways

• It’s worth mentioning that Tesla has generated much of its revenue from regulatory credits.
• The self-driving cars along with a retail version of the humanoid robot – a logical extension of the tech required of their cars – could change the business model of the company entirely.
• Elon Musk predicted that the humanoid robot would be ready within 3-5 years for less than $20,000 and that it would transform civilization.
• Musk reiterated many times how the public owns Tesla and that he can’t simply do whatever he wants, he could be fired, and the shareholding public always has a voice.

Tesla has been in the financial news for a variety of reasons over the last few months. There was a Tesla stock split, the company announced a recall, and the CEO Elon Musk is a constant source of buzz, a substantive Kardashian of science capable of space travel.

The celebrity CEO of Tesla, Elon Musk, enjoys putting on a show and garnering interest for the company. Unfortunately, the Tesla stock often feels the impact of Musk’s actions. However, Tesla just made some announcements that could change the landscape of artificial intelligence forever.

We’re going to look at what happened at Tesla AI Day 2022 to see what the news coming out of this event likely means for Tesla stockholders.

What was announced at Tesla AI Day?

They started the session off by having the humanoid robot come out to dance on stage. The Optimus is designed to be a highly capable robot ready for fully scaled production, and it could sell for less than $20,000 according to Musk. While this robot is still some years away from hitting the market, it appears that the company is optimistic about its potential. Tesla is already working on the next version of the humanoid robot.

The day was mainly produced to draw the world’s best minds in AI to join the team. Since the company is actively recruiting, the event got fairly technical and some of the information likely went over the heads of most investors.

The fully self-driving car is not yet ready for the market, but the company continues to work on it, including a computing framework that has moved the computing world forward with new chips and racks. The FSD Beta has many challenges, but the company is intent on making this happen. Once the fully self-driving car is ready for the market, the company can introduce its robot taxi service which would be a mix of Airbnb and Uber.

You can read our full recap from Tesla AI Day here if you’re interested in more.

What does this Tesla AI Day mean for investors really?

Investors paid close attention to Tesla AI Day to see what’s on the horizon for the electric vehicle maker. Tesla has been criticized in the past by some analysts for how much the company relies on regulatory credits for turning a profit. The company strives to be known for more than just “cool cars” as they bring continuous innovation to the AI space.

Here are a few key takeaways for Tesla investors…

Optimus has the potential to drastically change the market

Musk predicted that this robot could sell for less than $20,000 and be ready within 3-5 years. The robot would be an additional source of income along with changing the operations of the business, if it can perform advanced tasks for the company, from technical work to administrative duties.

Musk went as far as to say that the humanoid robot would be a “fundamental transformation for civilization,” which would undoubtedly bring more efficiency and attention to Tesla if it happens. We can only predict that bringing a humanoid robot to the market would increase shareholder value.

Additional revenue streams

Suppose the company is able to add a humanoid robot and a self-driving taxi service to its business model. In that case, we can only assume that this will significantly increase the company’s revenue. Adding new revenue streams that are profitable is always good news for investors.

There’s just no guarantee that the market, and general public, will be ready for a robot taxi service, assuming the company can get past the safety and regulatory hurdles.

Tesla also brought detailed insight into how it could lend its Dojo super chip to other companies for AI training, similar to Amazon Web Service, Tesla could sell compute time on a Dojo. We will be paying attention to see how this plays out but it’s a potential multi-billion dollar byproduct of building better AI that also drives an established industry forward faster.

Investors in Tesla stock would clearly benefit from new revenue streams. While many of us know Tesla for its electric vehicles, the company generates substantial revenue from selling its regulatory credits and energy storage. A big play in cloud computing could more than replace Tesla’s revenue from selling carbon credits. For context, Tesla didn’t turn a profit until 2022, largely kept afloat by selling its emissions credits. Recently, the energy side of the business has brought in more revenue with total energy revenue for Tesla reaching $2.78 billion for 2021. Unfortunately, this revenue stream had expenses of $2.91 billion which led to a $129 million loss for the sector.

The self-driving car could change the industry

The team at Tesla has come a long way with the full self-driving car as they have 160,000 beta testers, but the company still faces many regulatory hurdles and safety issues. If fully self-driving cars and a robot taxi service can hit the market, then this would sharply increase the company’s revenue.

Elon Musk could be fired

Musk made it clear that they could fire him since Tesla is publicly traded. This is important for investors because the CEO of a company plays a major role in the share price. While it doesn’t appear that Tesla will move forward without Elon Musk any time soon, it’s important for investors to be reminded of their role in deciding on the management team of the company. There’s no telling to what would happen to the share price of Tesla if Musk were to no longer be its public face.

With all of that being said, we have to stress that most of these innovations aren’t ready for the market yet. Companies like Apple use these showcase events to launch new products that are ready for market. In contrast, Tesla discusses products that are years away from being market-ready to recruit talent and build hype.

How should we be investing?

As an investor, it’s challenging to buy or sell based on hype and speculation, though it is a core capability of the best AI investing technology. Tesla’s AI Day certainly gave us a lot to get excited about AI across the board, but the company has a long way to go with many of these innovations.

This year has also been a rough one in the stock market as soaring inflation, persistent rate hikes from the Fed, and the fears of a recession have led to extreme volatility. The S&P 500 was down 9.3% for September, the largest monthly decline since March of 2020. This news is unsettling as a tumbling stock market impacts every company. We’re also going to see how Tesla’s demand changes during this time of high inflation where many folks are thinking twice about discretionary spending.

Another way to make money from Tesla and innovations in the AI space is to invest in one of our Kits. AI-powered Investment Kits take the guesswork out of investing. Our artificial intelligence searches the markets for the best investments for all manner of risk tolerances and economic situations.

Bottom Line

Musk is a controversial figure, to say the least, from announcing that he’s buying Twitter to then changing his mind on the deal with private text messages becoming public. All of this could impact Tesla stock, so you must pay attention to company-related news as an investor.

It’s no secret that Tesla believes in the future of artificial intelligence. It’s going to be worth watching to see how the company monetizes these future products when they’re ready to launch. A humanoid robot that’s available to regular citizens would certainly change the labor market and, in a very real way, the world. That’s not just hype if the team we saw at AI day delivers, but it’s difficult to get excited about something that has such a long way to go. In addition, we’re going to be tracking the financial performance of Tesla as the company has to deal with soaring inflation and global concerns of a recession.

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