Nvidia’s (NASDAQ:NVDA) CEO Offers Praise to Elon Musk
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Nvidia’s (NASDAQ:NVDA) CEO Offers Praise to Elon Musk

Story Highlights

Nvidia’s Jensen Huang comes out in favor of Elon Musk’s pay package, citing Tesla’s incredible strides in AI driving in a market where electric cars are less in demand.

There already weren’t that many who were wondering if Elon Musk was worth the vast pay package he was slated to pull. Aside from, of course, judges who apparently know more about executive pay than a company’s board and shareholders, but that’s largely beside the point. At any rate, one person who doesn’t have much problem with Tesla’s (NASDAQ:TSLA) founder and CEO landing a huge payday is Nvidia (NASDAQ:NVDA) co-founder Jensen Huang. Huang came out in praise of Musk ahead of the newest vote, which will, hopefully, mean something this time.

Nvidia and Huang know from success, having seen shares run up massively on the strength of a growing demand for artificial intelligence (AI) chips and accompanying infrastructure. But Huang also had high praise for Musk, noting that “…Tesla is far ahead in self-driving cars.”

This is actually a telling remark, as much of Musk’s self-driving car plans are built around AI. This is a risky pivot on Musk’s part, as it’s a sea change from its original mission of focusing on sustainable travel. Tesla was originally planning to ramp up production, but it has since pulled back to refocus on AI.

Tesla’s Pivot Supported by Current Market Dynamics

Tesla’s pivot is unnerving, certainly, but it also seems to be supported by current market dynamics. Tesla’s original mission may have been to promote sustainable driving, but the market seems a whole lot less interested in that than it once was. Tesla sales are in decline, but so are those of the wider electric vehicle market. With legacy automakers like Ford (NYSE:F) pivoting to hybrids instead of pure electric, Tesla doesn’t have much choice but to pivot either.

Thus, focusing on its self-driving system and making it an actual self-driving system instead of the current “mostly self-driving but you have to babysit it constantly” system just makes sense. There’s little doubt that Huang sees that as well.

Is Tesla a Buy or Sell?

Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on nine Buys, 14 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. After a 10.9% loss in its share price over the past year, the average TSLA price target of $174.60 per share implies 2.59% downside risk.


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