Tesla's Price Hits New High, But Analysts Are Lifting Their Price Targets Even Higher

Tesla has recently received two more bullish price targets. Analysts from investment banks Wedbush and Mizuho have both raised their target price for the stock to $515, which is more than 7% higher than the current level and is the highest target price given by Wall Street analysts.

On Tuesday, Tesla's stock hit a record high for the fifth consecutive day, closing up 3.64% at $479.86. Since President-elect Donald Trump won his second term, Tesla has had a series of positive developments, with its stock price having risen by more than 90%.

According to media reports, Trump's transition team is suggesting comprehensive reforms, cutting support for electric vehicles and charging stations, and strengthening measures to prevent foreign cars, parts, and battery materials from entering the U.S. market. Although this could hurt Tesla's sales, the impact on Tesla's competitors, including traditional automakers like General Motors, would be even greater.

The media reported last Friday that Trump's team suggested that the new administration rescind an order from the National Highway Traffic Safety Administration (NHTSA) requiring car manufacturers to report accidents involving autonomous driving. This is clearly beneficial to Tesla, which has reported over 1,500 accidents involving its FSD and Autopilot software to the NHTSA.

Last month, the media reported that members of Trump's transition team told advisors that they plan to make the federal legal framework for fully autonomous vehicles one of the Department of Transportation's priorities. This indicates that the Trump administration intends to relax regulations on autonomous vehicles. This is a huge positive for Tesla. Musk has said many times that Tesla's future depends on FSD and autonomous driving technology.

Mizuho: Tesla Will Have "Idiosyncratic Tailwinds"

Mizuho analysts have upgraded Tesla's rating from neutral to outperform and have more than doubled their target price for the stock from $230 per share to $515.

Led by analyst Vijay Rakesh, Mizuho's analysts said, "We expect TSLA's leadership across EVs, solar/battery storage, and charging infrastructure should allow the company to better weather the storm than less-established peers as the Trump administration removes subsidies for key end-markets."

These "idiosyncratic tailwinds" include the expected relaxation of autonomous driving regulations and policies proposed by Trump, such as ending tax credits for electric vehicles. Mizuho's analysis shows that these policy moves will put Tesla in a more favorable position than its peers, as the company has a lower cost structure for electric vehicles and a more profitable electric vehicle roadmap, with plans to launch low-cost vehicles in the coming years.

In his sum-of-the-parts valuation model, Rakesh values Tesla at $1.8 trillion, with the core automotive and energy business valued at $711 billion, the autonomous driving business at $614 billion, and the humanoid robot business at $472 billion.

Mizuho estimates that by 2040, Tesla will sell 7.2 million humanoid robots, with an average price of $23,000, generating revenue of $166 billion.

Wedbush: The Future of Autonomous Driving Is Key

In the view of Wedbush analyst Dan Ives, Tesla's bullish case largely depends on its future in autonomous driving.

Ives raised his target price for Tesla from $400 to $515 and said that in a bull scenario, the stock could surge 38% by 2025, to $650.

"We estimate the AI and autonomous opportunity is worth at least $1 trillion alone for Tesla and we fully expect under a Trump White House these key initiatives will now get fast-tracked," Ives said in a report.

Ives emphasized that his bullish price target does not include the potential upside from Tesla's development of the humanoid robot Optimus, but rather depends on the company's growing presence in the field of artificial intelligence. He pointed out that Tesla remains the most undervalued artificial intelligence company in the market today.