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Investing.com -- William Blair is encouraging investors to take a tactical view on Tesla stock as the company puts more focus on autonomous driving and its nascent robotaxi business.
The broker’s analysts believe Tesla’s (NASDAQ:TSLA) valuation is “increasingly dependent on the robotaxi business” following a successful launch in Austin and the first autonomous vehicle delivery to a customer.
Tesla’s transformation from an automaker to an AI-driven mobility platform is central to the firm’s bullish stance. In a note to clients, analysts described the move as one that “opens up a new trillion-dollar total addressable market (TAM).”
“We fundamentally believe in Tesla’s long-term solution of neural nets and vision only, but acknowledge it opens up attack vectors for the inevitable hiccups to come,” they added.
William Blair maintained its Outperform rating on Tesla stock.
Still, the note acknowledged that the robotaxi rollout comes amid headwinds in the company’s core business.
William Blair is reducing its second-quarter delivery estimate to about 355,000 units, below the consensus forecast of 385,000. Analysts see a similar setup to last quarter, where buy-side expectations ran ahead of sell-side numbers.
Other risks include the cancellation of the Model 2 hatchback, flat to lower sales in China and Europe, the looming phase-out of the $7,500 U.S. EV tax credit, and intensifying competition from domestic rivals such as Xiaomi (OTC:XIACF).
The analysts also flagged regulatory risks from tariffs and foreign entity restrictions tied to battery materials.
William Blair’s valuation model puts Tesla’s robotaxi TAM at $1.4 trillion by 2040, assuming ride-hailing reaches 1.1 trillion miles annually. The analysts think Tesla could leverage its cost structure to charge 50% less per mile and still “achieve near 60% EBITDA margins.”
They expect Tesla to win 35% market share, compared to Waymo, Uber (NYSE:UBER), and Lyft (NASDAQ:LYFT) at 15%, 38%, and 13%, respectively, generating nearly $250 billion in revenue in 2040.
Based on its sum-of-the-parts analysis, William Blair values Tesla’s robotaxi business at $298.61 per share, energy at $30.73, and auto at $28.09, implying a fair value of $357.43.
While the road ahead may be bumpy, “we believe the launch of robotaxi keeps momentum at Tesla’s back,” analysts concluded.