Volatility Hits Tesla: Is It the Right Time to Buy the Dip?
This year has been unusually turbulent for shareholders of Tesla (NASDAQ: TSLA).
Robotaxi Reveal: Expectations vs. Reality
Investors were eager for a glimpse of the company’s self-driving robotaxi this summer. Many viewed this event as a significant milestone in Tesla’s autonomous driving journey and a preview of the company’s future.
However, in a surprising turn of events, CEO Elon Musk cancelled the unveiling, pushing it to October 10. Last Thursday, Tesla finally showcased their developments in self-driving cars and humanoid robotics—two critical components of its artificial intelligence (AI) strategy.
Following this long-awaited event, shares of Tesla dropped approximately 8% as of the latest update.
Perspectives from Wall Street
Many investors felt underwhelmed by the robotaxi and Tesla’s humanoid robot, Optimus. This raises an essential question: Were you actually at the event, or watching it from a distance on social media?
Most followers were in the latter group, as invitations were limited to high-profile individuals. Judging the excitement from afar can lead to misinterpretation of the event’s significance. However, several respected analysts who attended have different views.
Dan Ives from Wedbush Securities, a frequent commentator on financial news shows, referred to Tesla’s technology as a “game changer” after the reveal.
Gene Munster of Deepwater Asset Management gave a balanced assessment of the robotaxi showcase, highlighting excitement for Tesla’s advancements in autonomous driving while acknowledging that widespread use of the Cybercabs may take years. He also described the self-driving vehicles as “worth the wait.”
Regarding Optimus, Munster sees potential in these humanoid robots, thinking of them as more than mere prototypes, but still years away from market readiness.
Industry provocateur Cathie Wood, CEO of ARK Invest, is known as a strong supporter of Tesla. While her reaction to the robotaxi reveal isn’t expressly documented, ARK’s trading activity provides some insight.
On October 11, the day following the robotaxi event, ARK purchased 12,730 shares of Tesla for its ARK Next Generation Internet exchange-traded fund (ETF). Although this purchase appears modest compared to ARK’s usual transactions, it suggests the fund may see potential in Tesla’s long-term outlook.
Image source: Getty Images.
Is Now the Right Time to Buy Tesla Stock?
Insights from analysts Ives and Munster, along with Wood’s recent purchase, indicate a favorable outlook for Tesla. Though they recognize that the company’s innovations will take time to mature, neither voiced significant concerns.
As such, it wouldn’t be surprising to see ARK invest further in Tesla stock while it remains low. Collectively, these analysts view Tesla as a tech company, not merely an auto manufacturer.
With these factors in mind, the current drop in Tesla’s share price may represent a buying opportunity for investors willing to take a chance on a long-term AI player.
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Adam Spatacco has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
