Tesla to fall 70% after robo-taxi and AI ambitions stop protecting bankrupt company, says ‘Big Short’ investor

• “Big Short” investor Danny Moses is still betting against Tesla stock and expects it to fall to $50.

• Tesla’s focus on robotaxis and AI is distracting from its “collapsing” core business, he told CNBC.

• Besides the flawed fundamentals, Moses also noted that the company was under investigation by the DOJ.

Tesla shares are headed for a sharp correction and will see a decline that even new technology initiatives can’t circumvent, investor Danny Moses told CNBC.

“The Big Short” trader and longtime Tesla bear isn’t backing down from his bet against the electric vehicle maker, and he still expects Tesla shares to eventually hit $50, a drop of 70 % from current levels of $171. Indeed, the company’s ambitions in terms of robotaxi and artificial intelligence can only mask fragile commercial prospects for so long.

The Moses Ventures founder revealed a Tesla short last year, sparked by frustration over CEO Elon Musk’s purchase of X, formerly Twitter. According to Moses, this eroded Musk’s focus on Tesla, at a time when many headwinds were growing.

Moses again focused on Musk to explain why he remains pessimistic on the stock, which has already fallen nearly 33% year to date.

Shares rebounded briefly after the CEO doubled down on robotaxi and AI plans during his first-quarter earnings call, but Moses sees such announcements as a distraction from the company’s flawed fundamentals.

“For someone who cares so much about the human race, he’s laying off a lot of humans right now, and it’s all falling apart in his core business,” he said Sunday. “So what does he do? He shows everyone robotaxis, AI, autonomy and all that.”

Before the first quarter results were released, many on Wall Street had also become cautious about the electric vehicle company, citing plummeting delivery volumes and a gloomy outlook for the sector.

The list of headwinds extends beyond its performance, Moses noted, citing that Tesla now faces a Justice Department investigation into whether Tesla misled consumers and investors about the capabilities of autonomous driving of its vehicles.

“The more time passes here and the more pressure their core business is under, I think this decision to open it up to robotaxis and AI will fade over time. So a market capitalization of $150 billion at $50 – that seemed like a reasonable valuation to me,” he said.

While Moses considers Tesla his biggest short, he has touted a separate self-driving company called Wayve. The company had recently raised $1 billion from major investors, such as Nvidia and Bill Gates.

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