A man named Jim Cramer thinks Tesla might be the first to lose value among a group of seven big tech companies. He says this because the boss of Tesla, Elon Musk, wants more control over the company and is acting childish about it. Read from source...
1. Cramer's prediction is based on his personal dislike for Tesla CEO Elon Musk and not on objective evidence or analysis of the company's performance. He has repeatedly expressed his frustration with Musk's personality and leadership style, which could cloud his judgment and make him overlook Tesla's potential as a leader in AI and robotics.
2. Cramer's comparison between Tesla and Nvidia is flawed and misleading. He implies that Nvidia's CEO Jensen Huang would need 5 times more shares to create a "super-duper generative AI", which suggests that Nvidia has a significant advantage over Tesla in terms of AI innovation. However, this ignores the fact that Tesla has been developing and integrating its own AI chips into its vehicles, which could give it an edge in autonomous driving and other applications of AI technology.
3. Cramer's argument that Musk needs 25% voting control to innovate is contradictory and illogical. On one hand, he claims that Musk is petulant and overreaching for wanting such a large stake in the company, but on the other hand, he implies that without it, Tesla would not be able to compete with Nvidia or other AI leaders. This shows his lack of understanding of Tesla's business model and strategy, which is not solely dependent on Musk's voting power, but also on its ability to innovate and disrupt traditional industries with electric vehicles and renewable energy solutions.
Negative towards Tesla and Elon Musk
- Microsoft (MSFT): Buy with a target price of $275 per share. MSFT has strong fundamentals, innovative products, and a dominant market position in the tech industry. The recent acquisition of Activision Blizzard also adds value to its gaming division. However, there is some risk due to increasing competition from Amazon, Google, and other cloud providers, as well as regulatory challenges in the EU.
- Advanced Micro Devices (AMD): Buy with a target price of $125 per share. AMD has been performing well in the CPU and GPU markets, gaining market share from Intel and Nvidia respectively. The company is also investing heavily in R&D to develop advanced chips for data centers, gaming, and AI applications. However, there is some risk due to supply chain issues, chip shortages, and price fluctuations in the semiconductor industry.
- Tesla (TSLA): Sell with a target price of $500 per share. TSLA has been facing several challenges lately, such as increasing competition from other EV manufacturers, regulatory scrutiny over its Autopilot and FSD features, and Elon Musk's controversial tweets and actions that may affect the company's reputation and stock price. Additionally, TSLA is pursuing a vertical integration strategy that requires significant investments in battery cells, factories, and infrastructure, which may strain its cash flow and profitability. The acquisition of Twitter also adds uncertainty to the company's future direction and focus. Therefore, TSLA is not a good long-term investment option at this time.