KEY POINTS
- Tesla (NASDAQ:TSLA) jumped about 7% to around US$420, bouncing back from last week's sharp selloff.
- The trigger was the launch of its Robotaxi service in Miami, its third US market, reviving the self-driving story.
- We see this as a relief rally on a promising but early milestone, not proof the robotaxi business has arrived.
- With the stock at roughly 200 times forward earnings, analysts are sharply split on whether it is a buy.
Tesla (NASDAQ:TSLA) was one of the market’s biggest movers on Monday, jumping about 7% to around US$420 and leading a broad rebound in electric-vehicle stocks. The catalyst was the launch of its Robotaxi self-driving service in Miami. In our view, the rally is as much about relief after last week’s steep selloff as it is about the news itself, and the sharp divide among analysts tells you why investors should think carefully here.
Why the Miami Launch Got Investors Excited
Tesla’s Robotaxi service, driverless cars you can hail like an Uber, is now running in Miami, its fourth US city, and making Florida its third state after Texas and California. What made this launch stand out is that Tesla ran the Miami cars with no human safety monitor from day one.
In Austin, its first market, Tesla ran cars with a safety person aboard for months before removing them, so launching a brand-new city fully driverless from the start is a first, and that leap signals real confidence in the technology. That confidence is a big part of why the stock jumped.
Here is the reality check, though. This is an incremental step, not a breakthrough. The Miami service covers only a small, geofenced slice of the city, roughly 10 to 14 square miles in the west, deliberately avoiding downtown, Miami Beach and the airport.
Tesla’s own CEO has said meaningful robotaxi revenue is unlikely before 2027. So while skipping the supervised phase at launch is a genuine milestone, we would be cautious about reading too much into a tightly limited rollout still years from paying off.
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Why Wall Street Can’t Agree on Tesla
This is where it gets interesting, because the experts are genuinely divided. On the bullish side, firms like Baird see big upside, with a price target as high as US$522, pointing to Tesla’s strong recent deliveries and its lead in self-driving.
On the cautious side, others call the stock “fully priced.” One well-known investor notes Tesla trades at more than 200 times forward earnings, an extraordinarily high figure, even as famed short-seller Michael Burry has just bet against it.
What this split really reveals is that Tesla is no longer valued like a carmaker. At 200 times forward earnings, the market is pricing in years of future success in robotaxis and AI that has not happened yet.
The removal of the safety monitor sharpens the debate: bulls see it as proof the self-driving system is ready to scale, while bears point to the regulatory and liability risk of fully driverless cars, especially with a federal probe into Tesla’s camera-only system and Miami’s heavy rain testing it.
The implication is simple: if that self-driving future arrives safely, today’s price could look cheap. If it stalls, or an accident triggers a crackdown, the stock has a very long way to fall.
The Investor’s Takeaway: Buy the Rally or Wait?
Our take: the bounce is understandable, but chasing it here is risky. The Miami launch is a genuine positive for the long-term story, yet it changes very little about Tesla’s near-term profits, which are under pressure from price cuts and thin margins. The stock is a bet on a self-driving future, not on this quarter’s earnings.
For long-term believers comfortable with wild swings, holding through the volatility makes sense, and dips may offer better entry points than a 6% up day. For everyone else, buying into a one-day rally on an incremental milestone, at 200 times earnings, is the kind of move that often ends in regret.
The smarter play may be to wait for the 22 July earnings report, which should reveal far more about margins and robotaxi economics than a single city launch ever could.
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