Tesla Chief Executive Elon Musk on Sunday suggested that Warren Buffett should invest in the EV giant, after the "Oracle of Omaha" addressed Tesla's Full Self-Driving (FSD) efforts during Berkshire Hathaway's annual shareholder meeting. TSLA shares advanced Monday.
Billionaire Warren Buffett commented over the weekend on the potential risk that auto insurers, such as Berkshire's Geico, could face if Elon Musk and Tesla succeed in their automated driving endeavor.
"If accidents get reduced by 50%, it's going to be good for society and it's going to be bad for insurance companies' volume," Buffett said. "But good for society is what we're looking for."
Berkshire Hathaway Executive Ajit Jain added during the annual meeting that while Tesla feels the number of auto accidents come down because of its technology, repair costs of each accident could go up.
"If you multiply the number of accidents times the cost of each accident, I'm not sure that total number has come down as much as Tesla would like us to believe," Jain said. He added that Tesla insurance so far "hasn't been much of a success."
"Time will tell but I think automation just shifts a lot of the expense from the operator to the equipment provider," Jain said.
Warren Buffett And Elon Musk
Following these comments, Elon Musk posted on X, formerly Twitter, that Warren Buffett "should take a position in Tesla."
"It's an obvious move." Musk said.
Buffett is a longtime investor in China-based Tesla rival BYD but so far has decided against investing in Tesla. Warren Buffett has slashed his BYD holdings in the past couple of years but still holds a significant stake.
Tesla stock gained 2% to 184.76 during market trade on Monday. On Friday, shares advanced 0.7% to 181.19.
Elon Musk And Tesla Focus On AI
During Tesla's recent earnings call, Musk spent plenty of time touting FSD, autonomy and artificial intelligence.
Tesla also recently recast full self-driving from FSD Beta to supervised FSD. The EV giant reported it would recognize deferred revenue of $281 million by the end of Q1, according to regulatory filings.
"The way to think of Tesla is almost entirely in terms of solving autonomy and being able to turn on that autonomy for a gigantic fleet," Elon Musk said on the earnings call.
Musk later added that "if somebody doesn't believe Tesla is going to solve autonomy, I think they should not be an investor in the company."
Tesla's free cash flow also went negative to the tune of $2.5 billion in Q1, as Tesla spent $1 billion on "AI infrastructure."
Tesla Stock Performance
TSLA shares jumped 7.7% last week to 181.19 after soaring 14.4% in the prior week. Tesla stock jumped 15.3% to 194.05 last Monday, making a decisive move above a key resistance level after regulators in China tentatively approved the introduction of FSD.
Since Tesla reported first-quarter earnings and revenue on April 23, TSLA shares have now gained about 25%. Tesla stock hit 52-week lows of 138.80 on April 22. Shares are still down 27.1% in 2024 as of May 3.
After rallying following Q1 earnings, Tesla stock has advanced past resistance at its 10-week moving average, according to MarketSurge analysis.
Tesla had struggled to retake this level for much of 2024.
Tesla stock ranks eighth in the 35-member IBD Auto Manufacturers industry group. The stock has a 41 Composite Rating out of a best-possible 99. Tesla stock also has a 21 Relative Strength Rating and a 62 EPS Rating.
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