Investing.com-- Wedbush Securities has raised its price target for Tesla (NASDAQ:TSLA), citing accelerated progress in autonomous and artificial intelligence (AI) initiatives under a regulatory environment expected to be more favorable during the upcoming Donald Trump administration.
Wedbush maintains an "outperform" rating and raises its price target to $515 from $400 with a bull-case valuation of $650 per share by 2025.
The investment firm sees Tesla’s potential in AI and autonomous driving as a $1 trillion opportunity. Analysts highlighted Tesla’s Full Self-Driving (FSD) technology as pivotal, estimating its penetration in the Tesla installed base could exceed 50%, altering the company’s financial model and margins.
“We believe Tesla could reach a $2 trillion market cap by the end of 2025 as the company's autonomous vision starts to take shape along with very solid Tesla delivery demand we expect from the core China market,” the analysts wrote.
Wedbush also emphasized the strategic importance of Cybercab, Tesla’s envisioned autonomous ride-sharing service, as a critical component in achieving this valuation.
Wedbush expects the Trump administration to ease regulatory bottlenecks that have hindered Tesla’s progress in autonomous driving. The analysts described this shift as a game changer that could fast-track Tesla’s goals, aligning them with China’s timeline for autonomous technology implementation.
China remains a key market for Tesla, and Wedbush anticipates potential tariff carve-outs during trade negotiations in 2025. Wedbush foresees Tesla CEO Elon Musk playing an increasingly influential role in shaping these discussions, mitigating geopolitical risks that could affect Tesla’s growth in the region.
Wedbush also pointed to Tesla’s broader strategy, framing it as a disruptive technology leader rather than merely a car company. The firm expects developments in Optimus, Tesla’s humanoid robot, to serve as an additional catalyst for growth, although this is not factored into the current valuation.