Tesla's market value hits $8.5 trillion? Analyst: This is by no means a pipe dream
Tesla's market value target is $8.5 trillion. Analyst Gene Munster believes that the disruptive impact of artificial intelligence (AI) is key to achieving this goal. Tesla CEO Elon Musk's new compensation plan will be voted on November 6, and if performance targets are met, compensation could reach $1 trillion over the next decade. Munster pointed out that Tesla can tap into AI potential through fully autonomous driving, autonomous taxis, and the humanoid robot Optimus, and the merger with xAI will further drive market value growth
According to Zhitong Finance APP, Tesla (TSLA.US) proposed a record new compensation plan for CEO Musk last week, which will be put to a shareholder vote on November 6. If Musk meets all performance targets, the total compensation could reach up to $1 trillion over the next decade, making it the largest CEO compensation plan in corporate history. To unlock all rewards, Tesla's market value must reach at least $8.5 trillion within ten years. For reference, as of last Friday's close, Tesla's market value was $1.3 trillion.
In this regard, Gene Munster, an analyst at Deepwater Asset Management, stated that the key to Tesla achieving this goal lies in the disruptive impact that artificial intelligence (AI) will have on human life. He emphasized, "The ability of AI to give rise to new forms of computing (such as physical AI) is the cornerstone of turning this fairy tale into reality."
Munster pointed out that Tesla can fully tap into the potential of the physical AI field through three major businesses: Full Self-Driving (FSD), robotaxis, and the humanoid robot Optimus, with Optimus representing the largest growth space. He also mentioned that the final key driver in pushing the market value to $8.5 trillion will be Musk's AI company xAI.
Although Musk has stated that there are currently no plans to merge Tesla with xAI, Munster and his team believe that a merger between the two companies would have triple strategic significance: first, after the announcement of the merger deal, Tesla's market value could immediately surge, while also releasing pent-up retail investor demand for xAI through Tesla's stock; second, Tesla is expected to leverage xAI's research results to aid in the development of its physical AI models, and additionally, xAI itself has significant commercial potential, especially with its Grok AI model; finally, xAI's consumer-grade chatbot is breaking through the current small-scale circle of about 20 million daily active users, creating momentum for growth.
Munster analyzed, "It is rumored that xAI's next round of financing will have a valuation of $175 billion to $200 billion, which is still suitable for Tesla to consider an acquisition within the next year."
