2 Reasons I'm Excited About Tesla Stock Following Last Week's Earnings Report
Key Points
Tesla's sales growth has stabilized.
Elon Musk teased an expansion of the robotaxi fleet.
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I wasn't 100% impressed by Tesla's (NASDAQ: TSLA) latest earnings announcement. Perhaps the biggest growth opportunity for the company over the next 10 years involves robotaxis. Some Wall Street analysts are expecting big things from Tesla's robotaxi efforts over the next 12 to 24 months, and the stock's valuation has a lot pinning on growth in this area. And yet, there were only minor updates from the company regarding this service.
Investors did, however, receive positive news on two important concerns.
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1. Sales growth is finally stabilizing
This year, Tesla has struggled to maintain positive sales growth. In fact, analysts expect total sales to drop around 3% this year. It has been a fairly slow year for electric vehicle sales overall, but Tesla seems to have been particularly targeted with consumer demand dropping by as much as 40% in certain regions of the world.
Fortunately, the end of choppy sales growth may finally be here. Last quarter, revenue grew 12% year over year to a record $28.1 billion. Some of this may have been related to U.S. consumers rushing to take advantage of expiring federal tax credits. But widespread backlash against the company's products, as well as its controversial leader, Elon Musk, may have finally found a bottom.
2. A preview of good news for Tesla's robotaxi service
While there were no major updates on Tesla's robotaxi service, which currently operates in Austin, Texas, Musk teased the possibility the company would expand to eight to 10 new metro areas by the end of the year. Previously, Musk had predicted "millions" of Tesla robotaxis would be roaming the streets of the U.S. by the end of 2026.
I'm skeptical of Musk's comments given his track record of missed projections, but investors can be cautiously optimistic that there is more growth anticipated for the robotaxi segment before the close of 2025.
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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