Investing.com -- Wedbush Securities has raised its 12-month price target on Tesla (NASDAQ: TSLA ) stock to a Street-high $500 from $350, citing a “massive stage of valuation creation ahead” linked to the company’s autonomous vehicle and AI strategy.
The brokerage reiterated its Outperform rating on the automaker, positioning Tesla as a leader in what it calls the dawning "golden age of autonomous growth."
According to Wedbush analysts Daniel Ives and Sam Brandeis, the upcoming launch of Tesla’s autonomous platform in Austin next month will be a pivotal moment, kicking off a new era of growth.
The analysts believe Tesla’s AI and full self-driving (FSD) technology will be central to this expansion, estimating the AI and autonomy opportunity alone to be worth at least $1 trillion.
They see Tesla as “the most undervalued AI play in the market today,” comparing its long-term AI potential to other tech giants such as Nvidia (NASDAQ: NVDA ), Microsoft (NASDAQ: MSFT ), and Alphabet (NASDAQ: GOOGL ).
Ives and Brandeis suggest that the company’s autonomous vehicle platform, including the anticipated Cybercab service, could unlock significant value as it scales across Tesla’s installed base.
Wedbush acknowledged early 2025 as a challenging period for Tesla, marked by controversy surrounding Elon Musk’s role in the Trump administration and the DOGE department. However, they now view those issues as “in the rear-view mirror,” noting a “recommitted Musk” focused on Tesla’s AI and robotics roadmap.
Wedbush forecasts the adoption of Tesla’s FSD solution to exceed 50%, which, in turn, should notably change the company’s financial model and margins. In a bullish scenario, the broker believes Tesla’s market capitalization could double to $2 trillion by the end of 2026.
“Rome was not built in a day...and neither will Tesla’s autonomous and robotics strategic vision,” the analysts said.
“There will be many setbacks....but given its unmatched scale and scope globally we believe Tesla has the opportunity to own the autonomous market and down the road license its technology to other auto players both in the U.S. and around the globe,” they added.
While challenges in markets like China and Europe persist, where growth in the Model Y segment remains a concern, the analysts believe the main focus for investors is the “AI revolution” that is coming to Tesla.