This article first appeared on GuruFocus.
Tesla (NASDAQ:TSLA) shares slipped about 3% Tuesday morning as investors weighed new self-driving developments from Nvidia (NVDA). The decline followed comments at the Consumer Electronics Show in Las Vegas.
Nvidia CEO Jensen Huang described autonomous vehicles as having a ChatGPT moment, highlighting the company’s new Alpamayo system. The platform offers deep reasoning for rare driving scenarios, allowing cars to navigate complex environments and explain decisions, rather than relying solely on preset rules.
The technology runs on Nvidia’s Thor self-driving computer, already integrated by automakers including Mercedes-Benz, Lucid, and BYD. Mercedes’ stock rose about 2% in early trading after announcing its CLA models will feature Nvidia-driven self-driving capabilities this year.
Nvidia does not operate vehicles or robo-taxi services, but the broad adoption of its systems could increase competition for Tesla and Alphabet’s Waymo, which run existing autonomous fleets in select U.S. cities.
Analyst Edison Yu at Deutsche Bank estimates Tesla’s robo-taxi unit could be worth $1.2 trillion by 2035, roughly $150 per share. Yu maintains a Buy rating on TSLA with a $470 price target, citing long-term growth potential.