MoJo in the DoJo: Musk has the world in an Anakonda Chokehold
The world's first Trillionaire...?
A $400 Tesla share price would mean that Tesla is well back into the "trillion dollar" market cap club, even surpassing NVDA (assuming zero growth for the AI giant that is). From the "rich list" perspective, it would make Musk close to 2x richer than the 2nd person on the list, and almost half-way to becoming a trillionaire. In terms of the beef with Zuck, he is tapping him out in terms of market cap and Anakonda choking him on the rich list. One can only assume that this MoMo leads to a KO in the Colosseum octagon when the real fight eventually happens.
Tesla's AI case
Adam Jonas of MS out with a high profile upgrade:
1. Tesla is eyed as both a tech and an auto company, with a growing emphasis on software and services for revenue generation.
2. The development of Tesla's Dojo supercomputing effort could potentially replicate AWS's contribution to Amazon's total EBIT.
3. Tesla's full self-driving system version 12 is anticipated to release OTA by the end of the year, marking a notable progression in its tech development.
4. Tesla's AI day in early 2024 is a key event to watch for insights into its tech advancements and future strategies.
MS sees that Dojo can add up to $500bn to Tesla's enterprise value. This is their top pick!
Source: Refinitiv
Source: MS
Dojo superiority
At the same cost as what's currently available, Dojo boasts great advantages
Source: Morgan Stanley
Source: Morgan Stanley
Closing the AI gap
If Tesla is an AI play, then maybe we could close some of the gap vs the AI proxy NYFANG?
Source: Refinitiv
The technicals
Tesla is stuck below the big downtrend line that has been in place since ATHs and the shorter term positive trend channel lows. The 50 crossed the 200 day moving average some 2 months ago. A close above the big negative trend line and things could start to get squeezy...
Source: Refinitiv
Not much AI "factor" priced in Tesla volatility
Pretty much all global vols have imploded over the past months, Tesla included. Most people see low vol as "stability", but if the AI hype is about to explode in Tesla, volatility to the upside could become very "dynamic". Chart shows 3 month historical and implied vols.
Source: Refinitiv
How to play via options
One way to play a possible Tesla break out is via call spreads in December. The Dojo effect won't happen overnight so we would look at maturities a few months out (that you could roll later if needed). The chart shows the Dec 280/330 call spread, approx 5x max pay off.
Source: Refinitiv
Remember, AI is bullish for the WORLD
"We see scope for generative AI to have a significant macroeconomic impact. We previously estimated that generative AI could drive a rapid acceleration of global productivity growth, roughly doubling the recent ~1.5% annual pace in DM economies over a ten-year period (but not necessarily the next 10 years) following widespread adoption"
Source: Goldman
See TME's daily newsletter email above. For the 24/7 market intelligence feed and thematic trading emails, sign up for ZH premium here.
