Wedbush reiterates outperform on Tesla with $500 target; Musk focuses on robotaxi expansion and AI

Wedbush reiterates outperform on Tesla with $500 target; Musk focuses on robotaxi expansion and AI

Wedbush Securities has reiterated its "outperform" rating on Tesla (NASDAQ: TSLA) stock, raising its price target to $500, the highest among analysts. This bullish stance is primarily driven by the company's robotaxi division, which Dan Ives, a notable analyst at Wedbush, believes holds a $1 trillion opportunity [1].

Ives is particularly optimistic about Tesla's autonomous driving capabilities, stating that the success of its robotaxi division is crucial for the company's future growth. He anticipates a $2 trillion valuation for Tesla over the next 12 to 18 months, which would double the company's current market capitalization. However, it is essential to note that Ives' price targets have fluctuated in the past, and investors should conduct their own research [1].

Tesla's robotaxi division, which is expected to launch in Austin in June, is seen as a key catalyst for the company's stock price. While the division will take years to fully develop, Ives believes that its near-term impact could be significant. Tesla's capital, manufacturing capacity, and brand recognition position it well to capitalize on this opportunity [1].

Meanwhile, Tesla's stock has formed a new valid base, with Cathie Wood's Ark Innovation (ARKK) ETF purchasing nearly 60,000 shares of Tesla on Friday [2]. This move reflects Wood's optimism about the potential of Tesla's businesses, including its robotaxi division and AI capabilities.

Elon Musk, Tesla's CEO, is also focusing on expanding his businesses, including SpaceX and potentially investing in his AI company, xAI. This strategic consolidation could further enhance Tesla's competitive position in the AI and robotaxi markets [2].

In a broader context, artificial intelligence is reshaping the tech sector, and its impact is still in the early stages. According to Wedbush analysts, the "golden era of AI" is just starting, with $2 trillion in AI-related spending expected from enterprises and governments over the next three years [3]. Companies like NVIDIA, Microsoft, Meta Platforms, Palantir, and Tesla are seen as top tech picks for the remainder of the year.

However, Tesla faces challenges, including a potential delay in the launch of its low-cost model and concerns about trade tariffs and regulatory pressures. Barclays, for instance, expects a 10% decline in 2025 vehicle deliveries and anticipates a modest sequential improvement in auto gross margin excluding regulatory credits [3].

Despite these challenges, the focus on Tesla's long-term autonomous vehicle strategy could drive stock performance. The company's earnings call in the second quarter is expected to highlight its robotaxi ambitions, potentially boosting investor sentiment [3].

References:
[1] https://finance.yahoo.com/news/why-wall-street-bullish-tesla-134155780.html
[2] https://www.investors.com/news/tesla-stock-new-base-cathie-wood-is-buying-elon-musk-business-empire-consolidation/
[3] https://www.investing.com/news/stock-market-news/5-big-analyst-ai-moves-microsoft-pt-hike-tesla-intel-could-soar-on-earnings-4142699