0:02 Speaker A
Tesla shares getting a lift in today’s trade amid bullish remarks from Wall Street and CEO Elon Musk. Yahoo Finance’s Pras Subramanian join me now with the details. Pras.
0:16 Pras Subramanian
Yeah, so the Melius research buy call here. They’ve they’ve reiterating a buy here, but basically saying that Tesla’s a must-own stock based on full self-driving autonomy, those types of of features, right? So they’re saying that autonomy or full self-driving or just cars going around by themselves in general is the analyst uh Brad Worthtimer said is coming very soon. And Tesla will benefit since the latest version of that FSD is the spark and legacy automakers like GM and Ford just can’t compete.
0:42 Pras Subramanian
Um, and he talked about, you know, we talk about this a little bit too, but also Tesla sort of makes a lot of stuff in house, right? Software, chips, whatever you you want to say. Um but the opportunity here is big, right? So, um, uh, what um, what’s this guy’s name? Uh, Wertheimer. I knew I’d remember this one.
0:58 Speaker A
The important, just the Melius. Just the Melius.
1:00 Pras Subramanian
Wertheimer said that it’s a four to five trillion dollar opportunity globally and 700 billion in the US alone. So, a lot of money at stake there, a lot of the transportation sort of future at stake there, and he thinks Tesla is the best position to do that.
1:11 Speaker A
I think he’s calling it a must-own. Here’s the other headline though. Musk goes on X, he’s talking about AI chips. What’s the story there and did Melius refer to that in the note?
1:20 Pras Subramanian
Yeah, so Musk over the weekend was talking about how Tesla is this global leader, right, in in chip making saying quote that, most people don’t know that we’ve been advanced AI chip and board engineering team for many years, etc. Uh making these chips are going to enable Tesla to be the leader in real world AI. They have a AI 4 chip that’s currently going to be in their newest cars and the next gen chip, the AI 5 will be in their cars in 2027.
1:50 Pras Subramanian
Now it’s kind of a delay from what they were saying originally, but those are chips that that sort of both help train the AI and then also for inference purposes, how the thing operates in the real world, right? So that’s a big deal and and it also and Melius the analyst, uh, Wertheimer, what his name?
2:03 Speaker A
Mhm.
2:04 Pras Subramanian
Wertheimer, uh said, yes, Tesla’s a sort of advantage of making their own chips, taking a gamble, something that you wouldn’t necessarily see the the the legacy automakers do is what Tesla does. And that’s sort of pain is going to pay off for them as they make the chips cheaper. They have control over it, they can integrate the software easily, all that sort of thing.
2:13 Speaker A
Final question though, did must say anything about the AI chips that was new? Cuz I thought we already knew a lot of this.
2:20 Pras Subramanian
He was saying something to the effect of like, no, we all we the chips are being made for years. We all we knew about that.
2:30 Speaker A
Yeah.
2:31 Pras Subramanian
He was saying something to the effect that we want to improve this every year, and we’re going to make as many chips as possible. We want to get this new the new foundry, which of course, he’s talked about before. So it’s not anything new. It’s just that he was sort of putting a focus on it that hey, a, the chips are here and they’re coming faster than what we’re going to say they are. Meanwhile, the AI 5 chip has been delayed. So, it’s more of the Musk sort of thing where he’s touting a big thing, but the it’s a timeline that that matters.
2:54 Speaker A
And the stock popping. Pras, thank you so much.
2:55 Pras Subramanian
Yeah, doesn’t matter, right? Yeah.
2:56 Speaker A
There you go.