🚕 Crazy (Robo)Taxi

Last week, Wedbush Securities analyst Dan Ives raised his price target for Tesla to a Wall Street high of $600, up from $500, “to reflect our view that an accelerated AI path for the company is now on the horizon and investors are underestimating the transformation underway at the company.” 

Tesla’s bull case has always rested on the automation element of its business, the opportunity to get in on a company that can turn cars and electricity into a money machine that overhauls the transportation industry of the country, if not the world. 

But as we know, it’s not exactly alone in the robotaxi quest, as there are dozens of other contenders angling for a slice of that pie. But from another perspective, Tesla is alone in that robotaxi quest because it hasn’t forged the kinds of partnerships that have defined the rest of the robotaxi sector.

• The other leaders in the robotaxi space, including Uber, Lyft, and Google’s Waymo, are relying on relationships with other companies — autonomous tech outfits, vehicle makers, fleet managers — to help furnish grand ambitions of driving Americans around autonomously.

• Waymo has partnered with Uber and Lyft in different markets to manage their fleets or use their existing ride-hailing platforms. Waymo, which also has its own ride platform, Waymo One, creates much of its autonomous tech in-house. It adds that tech to vehicles made by Jaguar Land Rover and Zeekr.

• In April, Volkswagen and Uber announced a long-term partnership, with service planned to begin next year in Los Angeles. This month, the first vehicle (of 20,000) from Uber’s partnership with luxury EV maker Lucid was delivered to the autonomous tech maker Nuro.

These relationships — between tech companies, automakers, ride-hailing platforms, and even car rental giants (did you know Avis will manage Waymo’s Dallas fleet?) — reveal a deeply interconnected yet competitive industry: dog-eat-dog, dog-help-dog, dog-help-dog-eat-dog, and so on.

The Takeaway

Currently, Waymo is the biggest robotaxi operation in the US, with more than 2,000 vehicles in service. But autonomous companies and their boosters have much bigger ambitions. Waymo aims to be “the world’s most trusted driver.” Tesla CEO Elon Musk, meanwhile, has said he expects autonomous ride-hailing to be available to “half the population of the US by the end of the year” and believes that Tesla will achieve 99% market share.

Read more.

• The AI infrastructure debate is heating up. Multiple gargantuan, multibillion-dollar data center projects were announced last week, which some skeptics warn may be “a tremendous amount of capital destruction,” while AI evangelists like Sam Altman think the build-out could be too slow. Whatever side you fall on, one thing is clear: this AI spending is about to outpace the billions spent on all private office space construction.

• Eli Lilly just showed the world how to outfox the tariff chaos. Most European drugmakers have announced some sort of investment in the US since President Trump’s tariff threats began earlier this year, so his latest announcement appears largely toothless. But Eli Lilly seems to have successfully front-run any possible tariff trouble, based on this chart tracking its imports from Ireland, where its most lucrative drugs are made.

We’re still in the “early innings” of the AI game

Sherwood News Senior Markets Correspondent Matt Phillips interviewed Citi US equity strategist Scott Chronert on high market valuations, why the AI effect may have room to run, and the bifurcation of the market into AI and traditional drivers. 

Check out one market expert’s POV on the expensive market.

• Nike, trying to break out of its funk, unveiled its high-stakes collab with Kim Kardashian’s Skims

• Not wanting to be left out of the celeb collab game, Crocs ran up on news it was featuring Sydney Sweeney in a new campaign

• GameStop jumped on promotions for the North American launch of the Mega Evolution set of the “Pokémon Trading Card Game”

• But that’s nothing compared to the spike EA saw on a report it’s nearing a $50 billion deal to go private

• The FAA is expected to ease the safety check process on planes, which was good news for Boeing

• Uber expects a whopping $12.5 billion in revenue from non-restaurant deliveries by the end of the year