Brokerage firm Stifel has raised Tesla’s (NASDAQ: TSLA) share price target by approximately 43%, citing confidence in the company’s advancements in autonomous driving technology.
This comes as Tesla aims to reclaim the $350 mark amid the ongoing post-election rally. At the close of trading on November 29, TSLA was valued at $345.13, ending the day up 3.6%.
The electric vehicle (EV) manufacturer extended its strength in the December 2 pre-market session, up 1.4%, trading at $350.
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Back to Stifel’s outlook, the firm has increased Tesla’s price target to $411 from the previous $287 while maintaining a ‘Buy’ rating. The analysts highlighted a ‘clearer path’ toward achieving full self-driving (FSD) technology and the development of the Cybercab.
“We are raising our target price sharply to $411 from $287 to reflect a clearer path to FSD and Cybercab, as well as our updated model,” the analysts noted.
The revised forecast accounts for a slight reduction in automotive margins due to the potential removal of EV tax credits and pricing adjustments. It also factored in increased contributions from Model 2 and Cybercab.
Stifel raised its FSD adoption projections, citing growing consumer acceptance, regulatory progress, and heightened confidence in the Cybercab’s market potential.
Breakdown of TSLA’s new stock price target
To this end, the $411 target price includes $144 per share for Tesla’s core business, $155 from FSD, $98 from Robotaxis, and $15 from Optimus.
Additionally, Stifel expressed confidence in Tesla’s potential beyond automaking, particularly its advancements in artificial intelligence (AI).
“While we have confidence in TSLA’s Auto business, the significant value creation potential from its AI-based full self-driving capabilities and Cybercab (Robotaxi) underpin our positive outlook,” Stifel said.
Notably, Tesla unveiled its Robotaxi in October, although regulatory hurdles remain a significant challenge for a broader rollout.
The brokerage also noted that CEO Elon Musk’s involvement in the Donald Trump administration could expedite regulatory approvals for self-driving technology.
What’s more, Musk and the Trump transition team are reportedly advocating for self-driving regulations to shift from state-level to federal oversight.
Wedbush Securities analyst Dan Ives has also echoed the bullish outlook on Tesla’s FSD and AI advancements.
As reported by Finbold, Ives suggested that Tesla is an undervalued AI stock, noting the company is likely to thrive under the upcoming administration’s plans to accelerate autonomous driving technology. He predicted Tesla stock could double in the next 18 months.
Tesla AI skepticism
However, while many analysts project growth for Tesla based on these fundamentals, some on Wall Street are expressing caution.
Particularly, UBS analyst Joseph Spak, for instance, questioned the valuation of Tesla’s AI ventures, which he estimates are being priced at nearly $1 trillion.
Spak attributed $52 per share to Tesla’s auto and energy businesses, with the remainder driven by speculative AI expectations.
All in all, while Stifel and other analysts remain bullish on Tesla’s potential in autonomous driving and AI, investors should exercise caution, as these products have yet to see widespread success and adoption.
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