Tesla: Mizuho hikes target, keeps Outperform with focus on AI amid softer EV sales

Investing.com-- Mizuho hiked its price target on Tesla on Thursday and maintained the stock at Outperform, stating that while the company’s core electric vehicle business was sagging, its AI, robotics and self-driving efforts still presented a positive long-term outlook.

Mizuho hiked its Tesla Inc (NASDAQ:TSLA) price target to $485.0 from $450.0. 

The brokerage said that Tesla’s robotaxi expansion, its Optimus robotics program, and its full self-driving capabilities were the key to the company’s outlook in the coming year. 

“We believe TSLA continues to be less an EV story and more a focus on robotaxis, humanoid robots, and autonomous FSD driving upside and multiples,” Mizuho analysts wrote in a note. 

They noted that only 12% of Tesla owners subscribed to the company’s paid FSD services, and that more improvements in the service could draw in more customers. 

Further ramp-ups of Tesla’s Optimus robot, along with more progress on the company’s Cybercab robotaxi are expected in the coming quarters, and could help offset a decline in the company’s EV business.

Progress in robotaxis, coupled with Tesla’s in-house AI5 chip could also further help scale up the company’s FSD ambitions, Mizuho said.

But the brokerage flagged near-term headwinds for Tesla from weakening EV sales. 

Mizuho sees Tesla’s 2025 deliveries at 1.67 million units, down 7% year-on-year. 

Tesla clocked underwhelming earnings for the third quarter, with its profit largely missing estimates despite record-high revenue and EV deliveries. The company did not provide a full-year outlook, with its EV sales expected to deteriorate further after the end of a lucrative U.S. tax credit scheme this year. 

Still, CEO Elon Musk talked up the company’s AI, robotics, and self-driving prospects, and also flagged strong computing gains from its upcoming, in-house AI5 chip.

Other analysts also saw strength in Tesla’s FSD and robotics ambitions. Wedbush maintained the stock at Outperform with a $600 price target, flagging a bull case scenario from a successful Optimus launch and increasing FSD adoption.