Here's what Wall Street analysts are saying about Tesla's AI day

Published Fri, Aug 20 20219:27 AM EDTUpdated Fri, Aug 20 202110:08 AM EDT

Jesse Pound @/in/jesse-pound @jesserpound

Tesla 's highly anticipated AI Day showed off the company's long-term potential and engineering talent, but the timelines for major breakthroughs remain murky, according to Wall Street analysts. At the event Thursday, which was largely a recruiting effort for engineering talent, Tesla explained its progress toward full self-driving cars. The company also unveiled a new custom chip for training artificial intelligence networks , and CEO Elon Musk announced that the company was working on a prototype of a humanoid robot . UBS analyst Patrick Hummel, who is neutral on Tesla, said in a note that the event served its purpose for recruiting talent but didn't change the timeline for full self driving. "Could we imagine any other [original equipment manufacturer] hosting such a session about achievements in autonomous driving, neural networks and machine learning? Clearly not. Did anything in the event change our view about FSD adoption or monetization opportunities over the next couple of years? No, neither," the UBS note said. Goldman Sachs analyst Mark Delaney, who has a buy rating on the stock, said in a note to clients the event showed that Tesla's engineering talent and trajectory were on the right track even as the goal of full self-driving remains far off. "We believe the event showcased the breadth of Tesla's engineering talent, the scope of the challenges to reaching full autonomy, and the necessary coordination of multiple teams within Tesla. While Tesla (and the broader industry) has been late to reach L4/5 autonomous driving ... we believe that Tesla's vertical integration/breadth of talent/custom solutions have the potential to be key differentiators especially when viewed in combination," the Goldman note said. The new robot drew some skepticism from Wall Street analysts. Bernstein's Toni Sacconaghi, who is bearish on the stock, said the event served as a reminder of Tesla's potential but also raised red flags. "The announcements are likely to reinforce bulls' conviction that Tesla is also a semiconductor, supercomputer and AI company, with myriad incremental revenue streams. We worry about Tesla's level of integration and breadth of focus, and see the bot – in particular – as a distraction," the Bernstein note said. Shares of Tesla closed at about $673 per share on Thursday, down 4.6% for the year. However, the stock has gained momentum during the summer and is up more than 14% over the past three months. Here's what some other Wall Street shops had to say about AI Day. Wells Fargo - Equal weight rating "While the Bot reveal is exciting, 2022 seems optimistic given the years of development for similar tech at Boston Dynamics. The Bot reveal excitement will likely provide a near-term boost to shares; however, we expect the ramp of the Austin & Berlin plants, the NHTSA Autopilot investigation, and possible US EV credits to be more relevant mid-term drivers." Wedbush - Outperform rating "Unfortunately, as we have seen with robotaxis and other future sci-fi projects for Musk we view this Tesla Bot as an absolute head scratcher that will further agitate investors at a time the Street is showing growing concern around rising EV competition and safety issues for Tesla." Roth Capital Partners - Neutral rating "We see this publicity event as an effort to distract from substantial credible progress made by systems developers like Waymo, Cruise and Uber, which are backed by a vibrant ecosystem of hardware, semiconductor, and software suppliers." -CNBC's Michael Bloom contributed to this report.

Tesla CEO Elon Musk gestures as he visits the construction site of Tesla's Gigafactory in Gruenheide near Berlin, Germany, August 13, 2021.

Patrick Pleul | Reuters

Tesla's highly anticipated AI Day showed off the company's long-term potential and engineering talent, but the timelines for major breakthroughs remain murky, according to Wall Street analysts.