Nvidia and Tesla are the best companies in 'physical AI', says Wedbush's Dan Ives

Core Viewpoint - The discussion centers around the potential for Tesla to reach a market cap of $3 trillion by late 2026 or early 2027, driven by advancements in autonomous technology and AI applications [4][9]. Group 1: Tesla's Market Potential - Tesla is expected to significantly increase its earnings power, potentially 4x to 5x over the next few years, due to advancements in full self-driving (FSD) technology and true autonomy [5]. - The company could capture 70% to 80% of the global autonomous market in the coming years, indicating a strong competitive position [9]. - Full self-driving penetration is anticipated to rise from 15% to as high as 50%, which would greatly enhance profit margins [10][12]. Group 2: Autonomous Technology and Robotics - The advancements in physical AI are seen as crucial for Tesla's growth, particularly in the context of robo-taxis and robotics, which are expected to be transformative for the company [3][9]. - The introduction of the Optimus robot is also highlighted as a significant factor in Tesla's future growth narrative [5][9]. Group 3: Competitive Landscape - The emergence of SpaceX as a public entity is discussed, with implications for Tesla's valuation and investor interest, suggesting that SpaceX could attract attention away from Tesla [7][8]. - Comparisons are made between Tesla and competitors like Waymo, with Tesla expected to outperform due to its scale and technology [11][12]. Group 4: Regulatory Environment - Anticipation of a federal executive order that could streamline regulations for autonomous vehicles is noted, which would benefit Tesla's operations and expansion plans [13].