"After its earnings announcements, Jim Cramer, America's ancient stockpicker and TV star, said Tesla Inc. ( NASDAQ: TSLA) stock was the only one of the Magnificent 7 he did not own. He added that earnings were hardly important. If they were, "the stock would be in the gutter because the electric vehicle business is in such bad shape." Then, Cramer added, "Tesla trades on Elon Musk's storytelling.""
"Tesla's most shocking comment is that it will kill half its model line (excluding the failed Cybertruck). On the chopping block are the Model X and Model S, luxury models that do not sell well. The Model 3 and Model Y, both much less expensive, make up almost all of Tesla's sales."
"Tesla will invest $2 billion in xAI, the social media and artificial intelligence company Musk controls. It would seem to be a conflict of interest, but there has been no outcry. Musk's SpaceX has already put money into xAI. Tesla wants access to xAI to help it build robots and a true self-driving car. A broad license of xAI software might have done just as well and would not have taken the $2 billion off Tesla's balance sheet."
Jim Cramer does not own Tesla stock and contends earnings matter little, asserting Tesla trades on Elon Musk's storytelling. Tesla plans to eliminate half of its model lineup, dropping the Model S and Model X while relying on Model 3 and Model Y for most sales. Tesla will invest $2 billion in xAI, with SpaceX previously investing, to gain AI capabilities for robots and a true self-driving car. Tesla forecast 2025 revenue of $98.4 billion, down 3%, and announced roughly $20 billion in capital spending to build production capacity, full self-driving technology, and the Optimus robot. Current robotaxi tests still require human oversight.
Read at 24/7 Wall St.
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