Tesla (TSLA) stock is usually evaluated through the prism of electric vehicles (EVs), and rightfully so. After all, Elon Musk’s company is the largest domestic EV manufacturer and one of the largest makers of those vehicles in the world.
While it’s fair to say Tesla is synonymous with EVs and luxury ones at that, some analysts and investors have long argued that Tesla should be evaluated and valued more as a technology company than as an automaker. Increased sentiment to that effect (there’s already plenty of it at play) could be a catalyst for Tesla ETFs such as the Direxion Daily TSLA Bull 2X Shares (TSLL ).
After all, Tesla is one of the Magnificent Seven stocks. That’s a group with deep roots in technology and artificial intelligence (AI). Speaking of AI, some analysts believe Tesla’s AI ties could be catalysts for the stock. That could potentially spell good news for TSLL in the process. For example, Melius Research analyst Rob Wertheimer started coverage of Tesla on October 13 with a “buy” rating and a $520 price target, implying upside of approximately 20% from current levels.
Tesla + AI Could Be Huge
Musk already has established AI credibility via SpaceX and xAI. But for now, those are privately held companies. And that makes Tesla the most accessible avenue for public market investors looking to tap into Musk’s AI prowess.
Of note to trades monitoring TSLL, Wertheimer wrote that xAI is one of the speediest companies regarding introducing new data centers and introducing and testing new AI technologies. Those efficiencies could pay dividends for Tesla investors. They could also potentially provide the headlines conducive to trading geared ETFs like TSLL.
“Tesla’s close links to Elon Musk’s other ventures, including SpaceX and xAI, which are expanding AI infrastructure and data center capacity. Wertheimer said the companies’ shared technology base and speed of execution support Tesla’s long-term competitive position,” according to Guru Focus. “The analyst added that Tesla’s development of autonomous driving is its first major real-world AI application. He expects the company to advance more rapidly than peers given its control of both hardware and data.”
In short, the Melius analyst called Tesla a “must own” AI name. That highlights the company’s autonomous driving plans as one of its marquee AI initiatives. Autonomous driving has been a tantalizing though often frustrating concept for investors. That indicates progress on that front could provide a near-term jolt for TSLL.
“The disruptive force of AI will wreck multi-trillion dollar industries, starting with auto,” notes Wertheimer. “Tesla and the Musk ecosystem can, and in a combination of tech and design/manufacturing that no one today can replicate.”
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