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Wall Street says Tesla really isn’t about cars anyway

It’s more about the hazy and tough-to-quantify potential for Musk’s business.

1/2/25 5:40PM

So Tesla’s fourth-quarter auto deliveries whiffed versus expectations and year-over-year annual sales were down for the first time since the company went public.

Not great. But analysts have been saying for a while that the bull case for Tesla simply can’t be premised on growth in the EV auto market.

No, the storyline now is all about the hazy and tough-to-quantify potential for businesses like Tesla’s full self-driving software and Cybercab under a Trump administration. Trump seems fairly receptive to ideas from Tesla CEO Elon Musk, who, after all, dipped into his spare-change jar and spent about $250 million to make Trump 2.0 a reality.

“We reiterate our belief that traction on [full self-driving] and Cybercab will be critical drivers to TSLA shares in 2025,” wrote Stephen Gengaro, an analyst covering Tesla for brokerage firm Stifel.

Analysts at Baird wrote that they “believe growth in the Energy business, launching (and scaling) a robotaxi business, and expanding the capabilities/use of Optimus are additional milestones to watch for,” The Wall Street Journal reported.

Generating excitement about the future among retail shareholders is a speciality of Musk, and arguably it’s that skill — and his alchemical ability to transform it into a financial advantage in the form of dirt-cheap capital from a devoutly loyal shareholder base — that has made him the world’s wealthiest man.

On the other hand, at a certain point excitement has to turn into tangible results. And the never-ending delays and lack of details surrounding the Cybercab, for instance, or the problems with Tesla’s self-driving software — analysts from Truist on Thursday published a note that bluntly said they couldn’t recommend using full self-driving as it’s “not ready for prime time yet” — could be a concern, especially if the company can’t reverse Tesla’s stalled-out auto sales.

On that front, it’s pretty clear that Musk’s personal hobby of meddling in politics — his latest political project, for some reason, is doubling down on support for Germany’s extreme right-wing party, AFD — is perhaps unsurprisingly a turnoff to would-be buyers of electric vehicles.

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SpaceX gets a wave of bullish ratings from Wall Street analysts

SpaceX received more than a dozen positive analyst calls on Tuesday — including from major Wall Street banks — as they initiate coverage on Elon Musk’s space and AI company.

SpaceX went public on June 12 at a $2.2 trillion valuation, the largest debut in history. While the company hasn’t yet posted a profit, it seems to have convinced Wall Street that it will get there and grow its valuation on the way.

Of the at least 17 analysts that gave a rating on Tuesday, all but one gave it a “buy” or “outperform” rating. MoffettNathanson was "neutral."

The ratings come as SpaceX joined the Nasdaq 100 index, a benchmark tech-heavy basket of companies that underpins millions of portfolios. The inclusion adds built-in demand for the stock from index funds and ETFs.

Still, SpaceX fell more than 5% on Tuesday amid a broader sell-off, and is currently effectively flat from its opening price of $150 a share.

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

Revenue of $11.0 billion (estimate: $10.8 billion).
Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

Wall Street says Tesla really isn’t about cars anyway

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