In a report released today, Ming-Hsun Lee from Bank of America Securities reiterated a Buy rating on XPeng, Inc. ADR, with a price target of $27.00.
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Ming-Hsun Lee has given his Buy rating due to a combination of factors, primarily focusing on XPeng’s advancements in ‘Physical AI’ and its potential impact on future mobility solutions. XPeng’s recent AI Day showcased significant innovations, including the VLA 2.0 large model, which is a new operating system paradigm for the physical world, enhancing decision-making capabilities with human-like learning and high inference efficiency. This system is powered by the Turing AI chip, offering substantial computing power, and is integrated with Alibaba Cloud’s infrastructure, indicating strong technological partnerships.
Moreover, XPeng’s strategic collaborations, such as Volkswagen becoming the launch customer for VLA 2.0, highlight the company’s growing influence in the automotive industry. Despite adjustments in gross margin estimates due to product mix changes, the analyst sees a robust model pipeline for the coming years, justifying the price objective increase to USD 27. This combination of innovative technology, strategic partnerships, and a promising product lineup underpins the Buy rating.