John Carl,
Editor
July 12, 2024
You read it here first: Tesla is overdue for a recovery.
Tesla’s stock has been on a wild ride this year — and a series of production setbacks sent the stock to new lows in April.
But I haven’t been phased by Wall Street’s disappointment.
Quite the opposite, in fact.
I’ve greeted it with enthusiasm.
My colleague Chris Curl and I told the investors who read our Digital Dispatch tech publication that these new lows were creating the perfect buying opportunity.
On May 1st, we wrote:
“We maintain that Tesla’s share price is a steal at these lower levels, and that we’ll see an enormous turnaround once their technologies come to fruition. It won’t be instantaneous and the exact timing is difficult to predict (John says 9-12 months for a true turnaround, Chris says 12-18 months or longer), but it’ll likely be worth the wait.
As for Tesla’s cash outflows? They’re an investment in that future. We don’t have false optimism about the headwinds Tesla has been facing. But we remain staunch in our positive bet on Tesla’s future.”
As you can see on the chart below, this strategy has been paying off.
Today we’re seeing a 76% gain since that April 22nd low.
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And we think there’s a good case to see these gains push into the triple digits as Tesla mounts a recovery.
Here’s what we’ve told our Digital Dispatch readers about Tesla’s prospects:
“Yes, it’s true Tesla keeps taking it on the chin. Production delays. Faulty software. Falling prices. And even when they do generate positive news, it’s buried under salacious headlines driven by its CEO’s offbeat antics. At the moment they’re stuck in a rough cycle of self-sabotage. To quote the old joke: ‘the beatings will continue until morale improves.’
And yet, we continue to greet each new misstep with a smile on our faces. Why? It’s because the litany of distracting news keeps pushing the price down in our favor. Tesla continues to be a better and better deal...”
And then here’s the most important part, which is about where Tesla is headed next:
“The real value in Tesla is not its electric vehicle business. We see its future bread and butter coming from its early lead in AI and robotics. These sectors could one day dwarf the revenue from electric vehicles — and change the trajectory of Tesla altogether.
(For the record: we’re not giving up on its cars. We still like many aspects of its vehicle lineup. And its charging network is also significant to the tune of billions in future revenue. It’s just that we see these as one day becoming an ancillary part of the business. We also believe that price movement will soon move away from its vehicle news.)
This isn’t a quaint armchair theory of ours. It’s the direction that Tesla has been moving for several years now, and the change isn’t accidental. Consider this post made by Elon in January:
As much as we’ve dismissed many of Elon’s posts (eyeroll!), this is one that he’s serious about. We’d like to also be clear: this isn’t a ‘pivot’ made out of desperation, as some news sources have suggested. Let’s not forget that Elon is the original founder of OpenAI (the creator of ChatGPT, which has since developed in a different direction post-Elon) and is one of its earliest movers and shakers. He’s never lost sight of this original goal.
Then there’s the most important factor of all. Tesla just shed its largest and most dangerous competitor: Apple. After ten years, more than $10 billion, the fruitless efforts of 5,000 engineers, and a decade of swirling rumors, Apple finally abandoned its attempt to develop a Full Self-Driving (FSD) car. For Apple, the ‘fully-automated’ aspect was always a non-negotiable essential. And for good reason: it’s the one innovation that can truly transform the $2 trillion transportation industry. Apple’s market testing has continually confirmed that millions of tired, stressed, and distracted commuters are ready to give up: the steering wheel. They’re ready to buy. But Apple couldn’t make it work — and so the biggest disrupter of music, laptops, and mobile phones was forced to give up on its plan to disrupt cars.
This automatically makes Tesla the winner. They were already ahead in terms of technology. And they’re already ahead on numbers, too. Tesla has 360,000 vehicles on the road as we speak that use some form of self-driving technology (even if that tech is still short of the elusive FSD goal). Apple had zero. With Apple officially out of the race, Tesla will be free to claim the final prize.
It’s our belief that this technology will generate billions, followed by trillions, one day soon.”
Tesla is in the process of rescheduling a delayed Robotaxi event (the Robotaxi market is thought to be worth $45 billion by 2030), which will reveal new developments in September or October.
This will be followed by events showcasing the updates of its AI technology and Optimus humanoid robot.
Apple *Finally* Reveals Its AI Strategy
Apple has been completely silent on AI for two years now. Even though they’ve spent millions buying AI firms, hiring AI engineers, and forging AI partnerships, they haven’t said a word — until two weeks ago.
Find out what Apple is planning for AI and why it’ll change the way customers access their data (and shift the focus of AI stocks).
All of these events will reveal more on Tesla’s pivot into these lucrative new technologies — and will likely have a direct impact on the share price.
If you’re interested in reading our updated case on Tesla’s rebound (and why this could show you triple-digit gains as an investor) then I urge you to read our latest issue of Digital Dispatch.
We’ll also update our forecast on August 1st, so there’s a lot more ahead.
Tech continues to lead the markets and this is your chance to join us in riding high on what’s next.
Make it your own,
John Carl
Editor, Daily Profit Cycle