Should you buy Tesla stock before October 10?

adze (TSLA -2.33%) is expected to unveil its highly anticipated Cybercab robotaxi at an event on October 10. That’s a big deal for investors, especially given the stock’s lackluster performance since peaking in 2021. They’re eager to hear what’s next from Tesla’s visionary leader, Elon Musk.

The specific plans for the new line of vehicles are still a mystery, but it’s clear that it will take some time for Tesla to generate significant revenue from a robotaxi service, especially when you consider the regulatory hurdles it has yet to overcome. exceeded. Uncertainties like this can create well-justified hesitation.

But there are at least three reasons why I would buy Tesla stock ahead of the announcement.

1. Tesla investors will likely be impressed by what’s being announced

The stock market has a history of rewarding companies with exciting growth opportunities. AppleThe unveiling of Apple Intelligence in June is a good example. Despite reports of apparently weak recent iPhone demand, the company’s stock price has risen 18% since that announcement.

Tesla stock will likely experience a similar rally after October 10, especially given its lackluster performance over the past two years.

Investors should leave the event impressed. Given Musk’s history of expressing great optimism when talking about Tesla’s future, they probably won’t be disappointed. He hinted in a recent post on X that the robotaxi event will be the company’s biggest moment since the Model 3 launch.

What happened after the Model 3? Tesla’s revenue and stock price rose over the next six years. It changed the game for its auto business, and a robotaxi service marks another step change in the company’s growth trajectory.

2. Tesla will be a major player in robotaxis

Tesla will go after a big market. Uber technologies It alone generates $40 billion in annual revenue, mostly from fees paid by drivers and merchants who use the service. Tesla will use its growing fleet of vehicles to create a similar business model.

Cathie Wood’s ARK Invest expects that almost all of Tesla’s profits will eventually come from a robotaxi service. Unlike human-operated ride-hailing services, Musk said on the second-quarter earnings call, the robotaxi service will operate 24/7. “You literally just open the Tesla app and call for a car,” he said. It sounds ambitious, but that’s why investors might walk away from the event impressed.

The hurdle for Tesla will be getting regulatory approval, which will depend on the safety of its self-driving capabilities. On that note, Tesla has received favorable reviews for version 12.5 of its fully autonomous driving (FSD) system. While not perfect, videos on X show Tesla vehicles navigating traffic with human ease.

Tesla says it has accumulated more than 300 billion miles with its FSD system. The company is making great strides in its self-driving capabilities and can become a competitive advantage. The opportunity is enormous, with Statista projecting that the global autonomous vehicle market will reach $2.2 trillion by 2030.

3. Tesla stock could rise in 2025

Stock is a buy even without a robotaxi service. Vehicle deliveries rose 15% in the second quarter. With interest rates expected to fall over the next two years and financing becoming more accessible, Tesla should see increased demand in 2025.

Moreover, the company plans to launch a more affordable model in the first half of next year. That should lead to better sales, and analysts currently expect Tesla’s revenue to grow 16% next year.

The stock is trading at a price-to-sales (P/S) ratio of 9, which is in line with its 10-year average. Assuming it continues to trade around its current P/S multiple, Tesla stock will move higher as revenue growth returns.