Tesla shares moved higher in early Wednesday trading, putting them within striking distance of a fresh all-time peak, following a big price target upgrade from a top Wall Street analyst.
Tesla (TSLA) shares have surged nearly 60% since election day, and are up more than 84% since the group unveiled its new robotaxi, dubbed the Cybercab, at a gala event in Los Angeles in early October.
Investors are betting that CEO Elon’s close relationship with President-elect Elon Musk, as well as his role in suggesting cuts to the federal government’s $6.8 trillion budget, will give the group an edge in regulation, and possible cover from U.S. tariffs, when he takes office early next year.
In the meantime, Tesla is also capturing investor interest in its robotics division, which is beginning to scale the Optimus humanoid robot for industrial use, as well as the AI technologies its using to power its full self-driving ambitions.
Legacy EV sales are also improving, particularly in China, where Tesla had its best month of the year in November, selling 73,000 units amid ongoing demand for its Model Y sedan, and shifted another 21,900 units over the first week of December.
AI demand drives growth
Musk himself, in fact, forecast Tesla would grow EV sales between 20% and 30% next year and vowed to launch a lower-priced model over the second half of 2025.
The group’s collective momentum has also triggered a host of ratings changes on Wall Street, with the latest coming Wednesday from Goldman Sachs analyst Mark Delaney.
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Delaney, who lifted his price target on the group by $95, taking it to $250 per share, noted the potential for weakness in Tesla’s legacy EV division but touted its position in both autonomous driving and robotics.
“While we see some fundamental headwinds to the core auto business over the near to medium term and see valuation as full, we also believe the stock could remain at a higher multiple to reflect the long-term opportunity tied to FSD/robotics given broader market interest in potential AI beneficiaries,” Delaney said.
$TSLA is up 84% over the last 65 trading days, or since the 10/11 ‘We, Robot’ event. As a comparison, the rest of the Mag 7 is up, on average, 10%, and the Nasdaq up 8%.
Tesla’s run is a direct result of a renewed belief in autonomy and future robotics. As Franz said at ‘We,…
— Gene Munster (@munster_gene) December 10, 2024
The analyst also noted that while Tesla sales have been trending lower in its three biggest regions, it could see a more stable share of the broader market as “several of the larger auto OEMs take a more selective approach to the EV market given likely reduced emissions requirements.”
General Motors (GM) , in fact, exited its nascent move into the robotaxi market through its majority-owned Cruise business earlier this week, citing the “considerable time and resources that would be needed to scale the business.”
AI demand drives growth
Ford Motor (F) , meanwhile, is cutting jobs in Europe and shifting its focus on internal combustible engine vehicles amid mounting losses in its EV division and the expected cut to purchase tax credits from the Trump administration next year.
Related: Analyst overhauls Tesla stock price target as ‘top pick’ in sector
“While we believe that the company is in a leading position in the domains of platforms & power, and in the broader clean mobility space (including EVs, storage, software, and charging), we expect Tesla will face headwinds in the core auto business over the near to medium term (including slower global EV demand, and pricing pressure),” Delaney said.
Tesla shares were marked 1.2% higher in premarket trading to indicate an opening bell price of $405.64 each. The stock’s all-time high of $409.97 each was recorded on November 4, 2021.
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