Wedbush Boosts Tesla Target to $600 on AI Breakthrough

Wedbush has raised its target price for Tesla (TSLA.US) to $600, the highest on Wall Street, while maintaining an "outperform" rating. The firm's optimism is driven by the accelerating development of artificial intelligence (AI), which is expected to deliver a significant breakthrough for the company.

Dan Ives, an analyst at Wedbush, argues that the market has severely underestimated Tesla's transformation potential. He highlights that autonomous driving and robotics technologies will become core strategic pillars for Tesla by 2026, acting as a "game-changer" that will determine the company's future trajectory.

Ives' team estimates that AI and autonomous driving alone could contribute at least $1 trillion in valuation for Tesla. Additionally, the firm anticipates that Tesla's core projects related to Full Self-Driving (FSD) and autonomous driving will be accelerated during the remaining term of the Trump administration. This is due to the expected dismantling of the federal regulatory "web" that has hindered the company in recent years.

Wedbush projects that under bullish market conditions, Tesla's market capitalization could reach $2 trillion by early 2026. By the end of 2026, as autonomous driving and robotics technologies achieve large-scale production, the market capitalization could further increase to $3 trillion.

Recent declines in European sales have put pressure on Tesla's stock price, leading to a 4.4% drop on Thursday. However, the stock has since rebounded, rising 1.50% to $429.60 at the time of reporting.

Looking ahead, the focus will be on October, when Tesla is scheduled to release its third-quarter delivery data and earnings report later in the month. These announcements will provide further insights into the company's performance and strategic direction.