Rob Wertheimer, Melius Research founding partner, joins 'The Exchange' to discuss the company's 'buy' rating on Tesla.

Tesla shares rose following a new 'buy' rating from Milius Research, which set a price target indicating substantial potential growth. Analyst Rob Wartheimer emphasized Tesla's unique position to integrate artificial intelligence with large-scale manufacturing and energy solutions, particularly in autonomous vehicles and grid-scale battery storage. Wartheimer noted that while robotics remains a speculative area, Tesla's ability to innovate and scale quickly sets it apart from competitors.

The analyst also discussed the importance of computing power and synergies with XAI in maintaining Tesla's competitive edge. Other companies, such as Deere and Caterpillar, were mentioned as having strong positions in their respective fields, but Tesla was highlighted as a must-own stock due to its exposure to transformative AI-driven changes in mobility and energy. The upcoming earnings season is expected to reflect these trends, with particular attention on Tesla's progress in autonomous driving.

Analyst on Tesla 'buy' rating: Unique ability to deliver on potential

Tesla shares are up 4 percent after receiving a fresh new rating from Milius Research, the firm initiating Tesla with a buy, a $520 price target. That's 26 percent upside from here, calling the EV maker a, quote, must-own stock and uniquely positioned to capitalize on AI disruption. So for more on this, let's bring in the analyst behind the call, Milius Research's Rob Wartheimer. Rob, it's great to have you on. Why? Why is Tesla a must-buy? So we're at the turning of an age here. I don't know how many of the viewers have had a chance to sit in a self-driving car, but this is a sea change in how we're going to interact with mobility. Tesla has a bunch of things that it does differently and historically been both risky and very successful. But we think that it can combine the ability to manage the massive increase in computing power, AI, with the physical scale, the innovation and manufacturing scale to really put it together. So it brings AI into the physical world at a turning point in history. What are some examples of how we see this coming to the physical world? Is it really through autonomous robo-taxis? Are there other applications here? I think about the energy and power side. We don't always talk about that business at Tesla. Yeah, no, so you're 100 percent right. So, yes, I think it's going to change the way people interact with vehicles and change the way they drive, change the robo-taxi, change the mobility industry. They also have grid storage. They have home-based and also utility-scale grid storage. And the grid is under strain right now. So they're very innovative and a leading player, leading, leading player in deploying utility-scale batteries to the grid. Following on to that, robotics is a whole lot more speculative. It's hard to know how transformational it will be in what time frame. But what I think is going to become undeniable is that the world is changing and AI is here. And that's going to be an investment theme that's hard to miss. Is the future of Tesla, as Elon Musk has suggested, and I realize that this is sort of like, you know, a moving, a moving timeline, if you will. But is the majority of the future of Tesla's value going to be wrapped up in these Optimus robots? I think that, so I think the first unlock is autonomy in vehicles. And I do think that that will surprise people on how amazing and different the experience is. You can't get around the fact that with the rise of robotics, that's become a larger portion of the potential value. And all these things are pools of value that are hard to predict, because they don't fully exist yet. But again, there's not that many companies that can run at the pace at which Tesla and the Musk ecosystem kind of more broadly can do. And when we said it'll wreck industries, that's why we think it's a must-own, simply because you have to have some exposure to the changes that are very, very large and unpredictable. How much of this hinges on the progression of XAI and investment by Tesla and synergies between the two companies? We do think it's actually important. I think it's a great question. I think that the rise of computing power is a new differentiator in the world of competition, right? So can you scale out? Can you get access to compute? Can you manage that? Can you channel compute effectively to do training for whether it's autonomous driving or autonomous robotics? And so I think the whole ecosystem does come into play and is an important one for Tesla. OK, I'm just looking at your coverage universe here. Are there other names that have this opportunity or this capability, even if maybe not as loud or aggressive as Tesla? There's a couple. I mean, we've written about Deere for years. I think Deere has a moat that is far wider and far more complex than most people understand in ag tech and farming. And I think that their ability to deliver value to farmers is second to none and will be second to none for many decades to come. So that's a future, you know, of autonomy that people are going to appreciate much more over the next five years or so. And we've highlighted Cat recently. I mean, one of the bottlenecks of the AI build out is simply access to power. And some of the companies that follow from Cat to Jeep or Nova are going to help unlock that. OK, how does all of this set us up for earnings season? So for Tesla, it's a confusing earnings season. You have the pre-buy ahead of some of these going away, and then you have an uncertain future after that. What we're really looking for in Tesla is just, again, progress as they roll out new iterations of wholesale driving. How does that look? How much training do you need before you roll out the next one, et cetera? And that's exciting. For some of the others, it's really a bifurcated market. So those attached to this AI thematic where just unimaginable amounts of cash are flowing are positively reflecting that in backlogs and earnings. And much of the rest of industrials are seeing more stable trends.

U.S. President Donald Trump is heading back to the U.S. after his whirlwind trip to the Middle East, where he celebrated the first phase of a peace plan between Israel and Hamas.

Sharm El-Sheikh

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The government shutdown entered its third week on Monday as the Senate is set to reconvene on Tuesday. CBS News' Nikole Killion has more from Capitol Hill.

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Madagascar's President Andry Rajoelina has been flown out of the country in a French military plane, officials have said, after an elite army unit defected to join thousands of protesters demonstrating against corruption and poverty.

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U.S. President Donald Trump was greeted in Tel Aviv with cheers and a military ceremony as he met families of hostages held in Gaza and addressed Israel's parliament. He now travels to Sharm El Sheikh, Egypt, to join world leaders in discussions on Gaza's future.

Tel Aviv-Yafo

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Twenty living hostages were released by Hamas after more than two years in captivity as a ceasefire continues to hold. Families in Israel describe emotional reunions while others continue to await confirmation about missing relatives.

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Israeli officials have confirmed that all 20 living captives have been released in Gaza.

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The carefully choreographed Israel-Hamas exchange is underway, with Israel set to release around 2,000 Palestinian prisoners following the release of remaining hostages held in Gaza. Noga Tarnopolsky reports from Tel Aviv’s Hostage Square.

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Following his visit to Israel, President Trump will stop in Egypt to co-host a major summit in Sharm el-Sheikh alongside Egyptian President Abdel-Fattah el-Sissi. The meeting will bring together leaders from more than 20 countries to discuss efforts toward peace in Gaza and the wider Middle East.

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The French presidency announced Prime Minister Sebastien Lecornu's new cabinet line-up on Sunday (October 12), with most top jobs remaining unchanged at a time when opponents are demanding a political shift to win their support for urgent budget talks.

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Seven captives have been handed over to the Red Cross, who will facilitate their transfer to Israeli forces.

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China on Sunday (October 12) called U.S. President Donald Trump's latest tariffs on Chinese goods hypocritical and defended its curbs on exports of rare earth elements and equipment, but stopped short of imposing new levies on U.S. products.

Beijing

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Afghanistan and Pakistan said they killed dozens of each other's troops during a night of heavy border clashes between the two countries. Afghanistan's Taliban forces launched attacks on Pakistani troops along their shared border in what it called "retaliation for air strikes carried out by the Pakistani army on Kabul".

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A ceasefire between Israel and Hamas held in Gaza for a third day ahead of the expected release of Israeli hostages and Palestinian prisoners and an address by U.S. President Donald Trump to Israel's parliament.

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Zelenskyy called Trump for a second consecutive day to discuss defence and Ukraine's energy sector. It comes as Russia further intensifies its attacks on Ukraine's critical infrastructure ahead of its harsh winter.

Kyiv

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On Sunday, the minister of armed forces in Madagascar acknowledged an officer selected by a military group supporting demonstrators calling for President Andry Rajoelina to resign as the country's new army chief.

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With a trade war between the U.S. and China intensifying ahead of a Nov. 1 tariff deadline, there’s growing concern Beijing will use Taiwan as a bargaining chip.

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In a televised address ahead of the planned release of Israeli captives and Palestinian prisoners, Israeli Prime Minister Benjamin Netanyahu called for unity despite ongoing divisions.

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U.S. President Donald Trump blamed Democrats for his decision to lay off thousands of workers across the U.S. government as he followed through on his threat to cut the federal workforce during the government shutdown.

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Thousands gathered in Tel Aviv as 48 of the last remaining hostages are expected home after two years of the Israel-Hamas war. The crowd cheered Donald Trump as the peace deal's broker but there were jeers for Israeli Prime Minister Benjamin Netanyahu.

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Diane Keaton, the Oscar-winning star of Annie Hall and The Godfather films, died Saturday at the age of 79, according to U.S. media reports. Entertainment journalist Johanna Schneller remembers Keaton as 'feisty and funny'.

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Former President Biden is now receiving radiation and hormone therapy to treat his prostate cancer, an aide said. The cancer is considered aggressive.

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It is unclear how many people were inside the Tennessee plant that exploded on Friday, but at least 16 people were reported on Saturday. Sheriff Chris Davis announced that there are no survivors. Nicole Valdes reports.

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Thousands of pro-Palestinian protesters in London marked two years since the War in Gaza. However, the British government has seen enough. Haley Ott reports that police have been given sweeping powers to curb repeated demonstrations.

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Middle East Envoy Steve Witkoff has addressed hundreds of thousands of Israelis in what's known as “Hostages Square” in Tel Aviv. Witkoff hailed President Donald Trump for securing the ceasefire. The crowd was less receptive to his praise for Benjamin Netanyahu.

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A ceasefire is in effect between Hamas and Israel after just over two years of war. An exchange of Israeli hostages and Palestinians held prisoner is set to take place in the coming days, and U.S President Donald Trump is set to visit the region on Monday.

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The families of hostages taken by Hamas on Oct. 7, 2023 are eagerly awaiting the return of their loved ones. The peace deal between Israel and Hamas would see the hostages returned within 72 hours of its implementation Friday.

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Ukrainian President Volodymyr Zelenskyy says he's had phone calls with Prime Minister Mark Carney and U.S. President Donald Trump about defence and energy infrastructure. Russian strikes have led to widespread blackouts in Ukraine.

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Gaza City lies in devastation — returning Palestinians find their homes reduced to rubble and familiar streets erased. It comes after a U.S-brokered peace deal came into effect.

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About 200 U.S. troops have begun arriving in Israel to set up a coordination center aimed at facilitating the flow of humanitarian aid, as well as logistical and security assistance into Gaza. They are not expected to enter the territory.

Breakdown