Tesla (NASDAQ: TSLA): Downgrade Amid Execution Risks
Bank of America Action:
Downgraded Tesla to Neutral from Buy but raised the price target to $490 (from $400).
Cited high execution risks in achieving long-term goals across autos, robotaxis, energy, and Optimus humanoid robot segments.
Robotaxi Opportunity:
Accounts for 50% of Tesla’s valuation, with a potential $420B market in the U.S. and $800B globally.
Initial rollout in 2025, starting with Tesla-owned fleets, offering cost advantages over rivals like Uber and Lyft.
FSD Technology:
Estimated value: $480 billion.
Expected adoption: 23 million vehicles by 2030, expanding to 75 million by 2040, with substantial EBIT contributions.
Catalysts to Watch:
Low-cost model launch (early 2025).
Robotaxi rollout (mid-2025).
Shanghai Megapack production ramp-up (Q1 2025).
Advanced Micro Devices (NASDAQ: AMD): Downgrade on AI Challenges
HSBC Action:
Downgraded AMD to Reduce from Buy, with a price target cut to $110 (from $200).
Highlighted weaker-than-expected AI GPU roadmap and competitive pressures from Nvidia.
AI GPU Market Struggles:
Tepid demand for MI325 GPU and delays in rivaling Nvidia’s NVL rack platform.
FY25 AI GPU revenue projection cut to $8.1 billion (down from $12.3 billion).
Key Timelines:
MI350 chip launch expected in H2 2025.
Competitor-equivalent AI rack solution not anticipated until late 2025 or early 2026 with MI400 chip.
Other Concerns:
Slowing client business momentum.
Limited growth potential in non-AI data center revenue for FY25.
Salesforce (NYSE: CRM): Needham’s Top Pick for 2025
Needham Action:
Added Salesforce to its Conviction List and increased the price target to $400 (from $375).
Confidence in Salesforce’s Agentforce (AF) strategy as a game-changer for enterprise deals.
Agentforce Impact:
Now involved in nearly 50% of enterprise-sized deals.
Pilot programs expected to ramp up deal sizes in H2 2025.
AI Integration:
Salesforce rapidly hiring AI-focused sales reps, likely boosting bookings in the second half of the year.
Valuation & Growth:
Trades at 24x FY26 free cash flow estimates with projected 20% FCF growth in FY26.
“Halo effect” from Agentforce to benefit related products like Mulesoft significantly.
Investment Considerations
Tesla:
Strong innovation pipeline but execution risks make the valuation less appealing.
AMD:
AI leadership challenges pose medium-term growth risks despite long-term potential in other markets.
Salesforce:
Promising growth driven by AI and Agentforce adoption makes it a compelling pick for 2025.
FMP API for further analysis
1. Advanced DCF API: Evaluate discounted cash flow (DCF) valuation, particularly given its long-term projections..Link to Advanced DCF
2. Historical Earnings: Review historical earnings data to monitor performance trends, especially in AI-related segments.Link to Historical Earnings
