Why TSLA Is Rising Today

Tesla (TSLA) is advancing 3% in early trading after the automaker reported weaker-than-expected fourth-quarter results but disclosed that it would launch an “unsupervised Full Self Driving” service by June.

Analysts’ views on TSLA were mixed in the wake of its results and comments, with Wedbush’s Dan Ives predicting that the automaker’s valuation would reach $2 trillion within 18 months.

A Look at Tesla’s Q4 Results

The company’s revenue came in at $25.7 billion, significantly lower than analysts’ average estimate of $27.15 billion. Moreover, it generated earnings per share of 73 cents compared with analysts’ mean outlook of 77 cents. Further, its income from operations tumbled to $1.58 billion in Q4 from $2.06 billion during the same period a year earlier.

Tesla’s Key Comments

CEO Elon Musk stated that unsupervised Full Self-Driving would kick off by June in Austin before being launched in other cities in the U.S.

The automaker reported that its deliveries in Greater China had reached record levels in Q4 and suggested that it would debut a new, relatively inexpensive EV in the first half of this year.

Analysts’ Reactions

Calling “autonomous/AI..90% of Tesla’s story,” Wedbush analyst Dan Ives predicts that the valuation of TSLA stock will reach $2 trillion within 18 months.

Seeing much more of a mixed picture was Bank of America. The bank is worried about the company’s Q1 sales volumes and its lower prices. However, Bank of America was pleased by the progress that  TSLA is making when it comes to robotaxis and its other new businesses.

While we acknowledge the potential of TSLA, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.