Investing.com -- Wedbush analysts raised their price target on Tesla (NASDAQ:TSLA) stock to a new Wall Street high of $550, from $515, citing “growing confidence” in the company’s delivery demand outlook for 2025 and the potential acceleration of autonomous and AI initiatives under the Trump Administration.
“Our time spent speaking to many in the Beltway the last few weeks give us a growing confidence the Trump White House the next 4 years will be a "total game changer" for the autonomous and AI story for Tesla and Musk over the coming years,” analysts led by Daniel Ives said.
Wedbush’s bull case target of $650 was maintained.
Ives and his team estimate that Tesla’s AI and autonomous technology opportunities could be worth at least $1 trillion. They anticipate that these key initiatives will be fast-tracked, leading to a possible $2 trillion market cap for Tesla by the end of 2025.
This valuation estimate is based on expectations of strong delivery demand from China and forthcoming positive commentary from Tesla on their earnings call next week.
Wedbush said its price target conservatively accounts for no value for Tesla’s humanoid robot Optimus, which could also become “a major upside catalyst for the Tesla story.”
The analysts emphasize that the value of Tesla’s AI technology is beginning to be recognized, which could significantly contribute to the company’s valuation. They predict that the penetration of Tesla’s Full-Self Driving (FSD) solution could exceed 50%, potentially transforming Tesla’s financial model and margins.
“We believe Tesla remains the most undervalued AI play in the market today,” analysts stressed.
A key factor driving this bullish view is Tesla’s and Elon Musk’s strategic bet on a Trump Administration victory, with the automaker now “set to reap the benefits from a new friendlier regulatory era.”
“We believe a Trump "regulatory friendly" White House helps unlock autonomous/AI value to Tesla’s stock as the autonomous/FSD timeline is likely accelerated starting in 2025 and a major tailwind for Cybercab timing,” the note states.
Other players, such as Waymo, are also seen as beneficiaries of this regulatory shift.