Jim Cramer Defends Tesla, Calls Elon Musk a "Bankable" CEO Despite Earnings Miss
CNBC host Jim Cramer defended Tesla, Inc. (NASDAQ: TSLA) and CEO Elon Musk on his "Mad Money" show, arguing that the electric-vehicle maker’s recent earnings miss and disappointing guidance were overshadowed by Musk’s vision for the company’s future. Cramer believes that Tesla is a long-term play and that its "bankable" CEO is a reason for optimism.
Key Takeaways:
- Cramer defends Tesla, calling it a long-term investment despite its recent earnings miss.
- He highlights Musk’s vision for Tesla’s future, including Optimus, full self-driving technology, and its energy business.
- He sees the current stock price as a good entry point for investors with a long-term horizon.
Tesla’s Future: Beyond the Car
Cramer acknowledged that Tesla’s auto business fell short of expectations, but he dismissed the concerns, arguing that the company’s true value lies in its future endeavors.
Optimus: The Humanoid Robot
Cramer highlighted Musk’s enthusiasm for Optimus, Tesla’s humanoid robot. Musk believes that Optimus will "exceed that of everything else Tesla has done" and that the humanoid robot market could be worth trillions. Cramer believes that even a fraction of that potential could translate into significant returns for shareholders.
Full Self-Driving Technology: A $5 Billion Business
Cramer also discussed Tesla’s commitment to full self-driving technology (FSD). He believes that FSD could become a major business, potentially generating $5 billion in revenue. Cramer sees FSD as part of a "customer-owned fleet" like an "Airbnb on Wheels," which could revolutionize transportation.
Energy Storage and Chips: Growth Avenues
Cramer highlighted Tesla’s energy storage business, which has seen significant growth. He also noted the company’s foray into the high-end chip business as it seeks to secure high-performance semiconductors.
A Downbeat Market and the Long-Term Vision
Cramer attributed the sell-off in Tesla shares to a general downbeat market environment for megacap stocks, suggesting that investors are overlooking the company’s long-term potential.
"Perhaps you have to buy this weakness because of the future which seems very bright," said Cramer.
He sees the current stock price as a good entry point for investors who are willing to be patient and long-term oriented. Cramer believes that Musk’s commitment to Tesla is a positive sign, implying that the company is in strong hands.
Musk’s Vision vs. Skepticism
Despite Cramer’s optimism, he acknowledged the skepticism surrounding Tesla and its valuation. Some investors view Tesla as solely a car company, dismissing the significance of its other ventures.
Cramer, however, believes that Musk’s ability to envision the future and his commitment to innovation are key reasons to be bullish on Tesla’s long-term prospects. He added that Musk’s vision is on par with that of Jensen Huang of Nvidia, another technology visionary.
Cramer: "Be Patient, Be Long-Term Oriented"
Ultimately, Cramer urges investors to remain patient and adopt a long-term perspective when investing in Tesla. He believes that the company’s future potential, driven by Musk’s vision and innovation, outweighs the recent earnings miss.
Cramer’s defense of Tesla highlights the debate surrounding the electric-vehicle maker’s future. While some investors may be discouraged by the recent earnings miss and the company’s valuation, others, like Cramer, see a strong long-term story driven by Musk’s forward-looking vision. Time will ultimately tell whether Cramer’s optimism is warranted.
