Analysts overhauls Tesla stock price target with Q4 earnings in focus
Updated at 9:42 AM EST
Tesla shares moved lower in early Tuesday trading, paring their 2025 advance to around 10%, despite a key price target upgrade from a top Wall Street analyst ahead of the group’s fourth-quarter earnings next week.
Tesla (TSLA) remains one of the market’s biggest post-election gainers, adding more than $560 billion in value since the close of trading on Nov. 4. Investors continue to bet that CEO Elon Musk’s close ties with President Donald Trump, and his key advisory role in the new administration, will benefit both the automaker and his portfolio of myriad businesses and investments.
Analysts are also betting on further gains powered by Musk’s broader ambitions in artificial intelligence, self-driving software, and robotics, each of which could benefit from looser regulations under the Trump administration.
That could partly offset the impact of narrowing profit margins and slowing demand in its legacy EV business, which posted its first-ever annual sales decline despite solid gains in China and price cuts in major markets worldwide.
Piper Sandler analyst Alexander Potter, who in a note published Tuesday boosted his Tesla price target by $185 to $500 a share, said investors were now “more willing to entertain upside scenarios” based on the potential of the group’s ‘real-world’ artificial intelligence.”
Potter argues that while Tesla’s near-term outlook is “highly uncertain, given the pullback in EV demand and questions tied to the launch of a lower-priced unit later this year, the group’s shift in focus toward AI-powered gains remains compelling.
Tesla is likely to deliver around 1.96 million vehicles this year, Potter estimates, an 11.4% advance from 2024, with “more than 100,000 incremental units to come from unknown vehicles, and another 70,000 incremental units from Cybertruck.”
Musk himself continues to stress, however, that Tesla’s longer-term prospects are aligned more to his ambitions for AI technologies, cybertaxis, energy storage and robotics than to legacy carmaking.
Related: Top analyst reworks Tesla stock price, rating with Q4 earnings on deck
Musk says the group will produce as many as 2 million autonomous Cybercabs a year by 2026 and insists that “20% to 30% vehicle growth next year” is likely, absent “some force majeure events, like some big war breaks out or interest rates go sky high or something like that.”
“Once Tesla fulfills its current launch pipeline, management’s focus will shift away from launching new cars and toward popularizing Full-Self-Driving software,” Potter said.
“To reflect this, we are now modeling a contribution from Full-Self-Driving licensing and value Tesla’s existing businesses at just below $300 per share, inclusive of Full-Self-Driving.”
Potter says the stock is likely to be “choppy” over the first half, as the EV market uncertainties affect sentiment, but he remains convinced that Tesla is a top “buy-and-hold idea” for 2025.
Tesla is slated to report fourth quarter earnings after the close of trading on Jan. 29, with analysts looking for a bottom line of 72 cents a share on revenue of $27.23 billion.
Related: Analysts deliver new auto insights following CES, shed doubt on Tesla
Gross profit margins, meanwhile, are forecast to widen modestly to 18.85%, according to LSEG data.
Tesla shares were marked 3.5% lower in early Tuesday trading to change hands at $411.70 each.
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