Can Tesla (TSLA.US) stock price reach 4,400 US dollars? “Sister Mu Tou”'s Ark bets on RoboTaxi and is expected to merge with SpaceX within 5 years

The Zhitong Finance App learned that Tesla (TSLA.US) closed up 3.8% to $368.06 on Monday, ending the previous five consecutive trading days of decline. Investors, on the one hand, digested reports that Alphabet's Waymo plans to expand its autonomous vehicle fleet fivefold, and on the other hand, await Tesla's third-quarter earnings report after the market on Wednesday. Meanwhile, ARK Investment Management, a subsidiary of “Sister Mu” Cathy Wood, gave a forecast of Tesla's stock price of 4,400 US dollars in 2031 and mentioned the potential possibility of a merger with SpaceX (SPCX.US).

ARK: Robotaxi contributes about 80% of corporate value

ARK expects Tesla's stock price to reach 4,400 US dollars by 2031, which is about 1095% of the potential upside compared to the current level. In its model, Robotaxi (autonomous taxi) contributes about 80% of the estimated corporate value, and the Optimus humanoid robot's contribution is higher than the previous model.

The ARK benchmark situation predicts that by 2031, Tesla's Robotaxis will have accumulated about 8.1 million units, and the cumulative overseas payment of about 1 million Optimus units; total revenue will be close to 1.45 trillion US dollars, and the market value will reach 17.5 trillion US dollars. ARK analyst Tasha Gini said on X: “Tesla is still in the early stages of scaling Robotaxi, but its vertical integration and cost advantages may allow it to take the lead in achieving a wide range of services.”

ARK estimates that after large-scale operation in 2031, the incremental operating cost per mile of Cybercab (cyber driverless electric vehicle) may be 40% lower than Waymo's Ioniq 5 platform. The company also revised pricing assumptions to reflect the willingness of a wider customer base to pay.

The merger hypothesis is another potential catalyst mentioned by ARK. “Although our model evaluates Tesla as an independent business, the SpaceX merger with Tesla could occur within the next five years,” the report said.

ARK believes Tesla's RoboTaxi cash flow can help fund SpaceX's orbital data center, and SpaceX's cutting-edge AI model can support Optimus. After the merger, the two companies are expected to generate $3.8 trillion in revenue and $2.7 trillion in profit before interest and taxes (EBIT) by 2031, of which SpaceX contributed 62% and 69%, respectively.

Cautious opinions remain: merging all shares or diluting Tesla shareholders' interests

Future Fund managing director Gary Blake said he had long believed that a merger between SpaceX and Tesla was inevitable, but reiterated the need to carefully look at the diluting impact of the all-share deal on Tesla shareholders. He said on X: “Overall, I don't think the SpaceX/Tesla All Stock Exchange will bring huge unexpected benefits to Tesla shareholders, even though the merger announcement itself is positive for Tesla's stock price.”

Blake made a hypothetical offer: around $420 per share, about 14% higher than Monday's closing price. He expects the merger's valuation to follow the buyer's valuation multiples, and quoted the ratio of corporate value to EBITDA for fiscal year 2027: about 29.4 times SpaceX and 72.6 times Tesla. He also believes that during the 6 to 12 month delivery process, consolidated arbitrage transactions may suppress stock prices.

Robotaxi progress and board vote

On Monday, Tesla issued a shareholder letter stating that its Robotaxi service has been expanded to 7 US cities, including Cybercab without steering wheels and pedals. The company also reported nearly 1.5 million paid FSD (fully autonomous driving) customers, and FSD Supervised has accumulated over 15 billion miles of mileage.

The company is seeking shareholder support to re-elect Musk, Chairman Robin Danholm, and J.B. Strauber at the December 3 annual meeting. According to the power of attorney, as of September 30, Musk held about 699.6 million shares, with a shareholding ratio of about 19.8%, including restricted shares in the 2018 award; although these shares have service-based expiration conditions, they have voting rights. The power of attorney also showed that based on the award date valuation, Musk's salary for 2025 was US$158.36 billion, including a US$26.1 billion mid-term award that expired in April.

The Q3 earnings report is about to be released, and retail investors focus on commercialization progress

Tesla will release third-quarter results after the US stock market on Wednesday. According to Koyfin data, the market expects a 1% month-on-month decline in revenue, a 15% increase in EBITDA, a 129% increase in EBIT, and a 36% increase in adjusted earnings per share. According to Fiscal AI data, revenue for the third quarter is expected to be US$28.98 billion, compared to US$28.10 billion in the same period last year; EBITDA is expected to drop from US$4.23 billion to US$3.4 billion in the same period last year; and earnings per share are expected to fall from US$0.50 to US$0.35.

Morningstar expects Tesla's free cash flow to be negative for the second consecutive quarter due to huge capital expenses. The agency also expects investors to take a close look at the company's recent guidance on Robotaxi and humanoid robots.

The financial reporting issues voted for by retail shareholders mainly focus on progress in commercialization. Among them, the question that received the most votes received about 1,000 votes: “When can we see FSD achieve unsupervised operation in customer vehicles?” This was followed by questions about when customers can buy and own Cybercab, which received 990 votes; questions requiring clarification of expansion outside of Austin and regulatory arrangements outside of Texas received 848 votes. The Optimus unit cost and first-time paying customer questions received 629 votes; another 437 votes asked “when does Optimus expect to start generating revenue”. The question of a possible free upgrade to the HW3 received 476 votes; other shareholders asked for details on Robotaxi's economy, insurance, and private fleet.

On Stocktwits, Tesla retail sentiment was “neutral” over the past day, and 24-hour news volume increased by 242%. Some users said, “Tesla has declined after most financial reports in the past. I think this will surprise some people...”

Another user said, “Tesla is a 'growing' car company and should not have traded at the same valuation as traditional car manufacturers. Operating profit has been declining for five consecutive years. It will never be able to support a market capitalization of $1.5 trillion and a price-earnings ratio of 340 times. The only lifesaver is Musk packaging his 'Ponzi business' into a bigger money-burning 'Ponzi.'”