Pierre Ferragu Says Tesla FSD Could Be At An 'Inflection Point,' Compares It To The iPhone Playbook — 'Give Us 2 More Quarters'

Ferragu argued that Tesla’s addressable market could expand significantly as consumers begin viewing its cars as AI-powered vehicles rather than just conventional offerings.

• Ferragu argued that investors continue to value Tesla primarily as an automaker, much like consumers initially viewed the iPhone as simply an expensive phone.
• He cited Tesla’s better-than-expected second-quarter deliveries as an early sign that the company’s FSD technology could be at an inflection point.
• Ferragu’s comments come amid the latest expansion of Tesla’s robotaxi service, which went live in Miami last week.

New Street Research analyst Pierre Ferragu on Friday said Tesla Inc.’s (TSLA) Full Self-Driving (FSD) business may be approaching an “inflection point,” arguing that investors continue to underestimate the technology’s value.

In a post on X, Ferragu likened Tesla’s FSD opportunity to Apple Inc.’s (AAPL) iPhone, arguing that the company's addressable market could expand significantly as consumers begin viewing its vehicles as AI-powered transportation platforms rather than conventional cars.

Tesla’s shares were down nearly 1% in Friday’s pre-market trade. TSLA was among the top trending tickers on Stocktwits at the time of writing.

TSLA Is ‘Not A Car,’ Ferragu Says

Ferragu argued that investors continue to value Tesla primarily as an automaker, much like consumers initially viewed the iPhone as simply an expensive phone.

He noted that Apple’s addressable market expanded dramatically as consumers recognized the iPhone as more than a phone, suggesting Tesla could experience a similar shift as buyers increasingly view its vehicles as AI-powered transportation platforms.

“A Tesla is not a car, the same way an iPhone was not a phone,” Ferragu wrote, adding that a Model 3 paired with a $ 100-a-month FSD subscription may seem expensive only when evaluated as a conventional vehicle.

“As a tool that gets you to work peacefully every morning, it is not expensive. Give us 2 more quarters to see where this is heading,” he added.

Ferragu cited Tesla’s better-than-expected second-quarter (Q2) deliveries as an early sign that the company’s FSD technology could be at an inflection point.

TSLA Rolls Out Robotaxis In Miami

Tesla announced the rollout of its robotaxi service in Miami last week in the latest expansion of its autonomous ride-hailing operations. The company is currently offering autonomous robotaxi rides in Miami, Florida, and Austin, Dallas, and Houston, Texas.

According to a Reuters report, Tesla CEO Elon Musk said in May that he expects robotaxis to become more widely available in the U.S. later this year.

“Five years from now and certainly 10 years from now ... probably 90% of all distance driven will be driven by the AI in a self-driving car. So overwhelmingly, it'll be quite a niche thing in 10 years to ​actually be driving your own car,” he said.

RBC Sees Robotaxi As TSLA’s Biggest Long-Term Opportunity

According to TheFly, RBC Capital raised its price target on Tesla to $500 from $475 this week while maintaining an ‘Outperform’ rating.

The firm identified Tesla's robotaxi business as the company's most compelling long-term growth opportunity. RBC estimates the autonomous ride-hailing market has a $4.2 trillion total addressable market, arguing that Tesla could create significant shareholder value even if it captures only a small share of that market.

The firm also said its updated valuation incorporates a 25% to 30% premium to Tesla's current trading levels to account for a potential merger with Space Exploration Technologies Corp. (SPCX).

What Retail Traders Think Of TSLA Stock

Retail sentiment on Stocktwits around Tesla trended in ‘bullish’ territory at the time of writing.

TSLA stock is down 10% year-to-date, while AAPL stock is up 16%. The S&P 500 ETF (SPY) is up 20% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 30%.

The Vanguard Total Stock Market Index Fund ETF (VTI) is up 21% during this period, while the Vanguard S&P 500 ETF (VOO) is up 20%.

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