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Investing.com - Barclays (LON:BARC) maintained its Equalweight rating and $275.00 price target on Tesla (NASDAQ:TSLA) on Thursday, balancing the company's AI potential against near-term challenges. According to InvestingPro data, Tesla currently trades at a P/E ratio of 174.79, suggesting premium valuation levels, with the stock slightly overvalued based on InvestingPro's Fair Value analysis.
The investment firm acknowledged CEO Elon Musk's vision that Tesla's future extends beyond automotive manufacturing, with artificial intelligence initiatives potentially positioning Tesla to become "the most valuable company in the world." Barclays noted Tesla's leadership in "real-world AI" through its Robotaxi and Optimus robot programs. With a market capitalization of $1.07 trillion and trailing twelve-month revenue of $95.72 billion, Tesla remains a prominent player in the automotive sector. Get deeper insights into Tesla's valuation metrics and growth potential with a comprehensive Pro Research Report, available exclusively on InvestingPro.
Musk is developing a new master plan outlining Tesla's transition from "pre-autonomy to post-autonomy," according to Barclays. The firm also highlighted the potential for collaboration between Tesla and Musk's AI company, xAI, which could strengthen Tesla's artificial intelligence capabilities.
Despite the promising AI narrative, Barclays warned that Tesla's fundamentals "remain choppy" and are "likely to deteriorate in the coming quarters." The firm cited several specific challenges, including the expiration of the U.S. electric vehicle tax credit after the third quarter, reduced regulatory credit sales, and the increasing impact of tariffs. InvestingPro data reveals that 16 analysts have revised their earnings downward for the upcoming period, while the company's gross profit margin stands at a relatively modest 17.66%.
Barclays also noted that Tesla's new low-cost vehicle model has been delayed until the fourth quarter, and suggested it might simply be a stripped-down version of the Model Y, raising questions about how much additional demand it will generate.
In other recent news, Tesla reported its second-quarter 2025 earnings, with earnings per share (EPS) of $0.40 and revenue of $22.5 billion, aligning with market expectations and slightly surpassing revenue forecasts. Mizuho (NYSE:MFG) maintained an Outperform rating on Tesla, setting a price target of $375, while noting the company's mixed results and future demand challenges. Piper Sandler also reiterated its Overweight rating with a $400 price target, describing Tesla's financial results as solid. Truist Securities maintained a Hold rating with a $280 price target, characterizing the Q2 performance as "noisy" but in line with expectations. Canaccord Genuity raised its price target for Tesla to $333 from $303, maintaining a Buy rating and basing the new target on future earnings projections. The automotive gross margins improved to approximately 15%, exceeding analyst expectations and representing a 250 basis point increase quarter-over-quarter. Despite these developments, Tesla's stock experienced a decline in after-hours trading.
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