Wedbush analyst Dan Ives raised Tesla's target stock price from $400 to $515 on Sunday, rating it as 'buy,' which is currently Wall Street's highest target price. His 'bull case' target price is even higher, reaching $650. The new target price raises Tesla's valuation to about $1.7 trillion, while the 'bull case' valuation is about $2.1 trillion.
On Monday, Tesla's stock price surged by 6.1%, closing at $463.02, while the S&P 500 index rose by 0.4% and the Dow Jones Industrial Average fell by 0.3%.
Ives stated that a second Trump administration could be a 'significant game changer for Tesla and Musk's autonomous driving and artificial intelligence story in the coming years.'
Tesla (TSLA.O) is training its cars to achieve autonomous driving using AI-based computing technology. Tesla and other companies have made progress in this area. Tesla's highest-level driver assistance software, 'Full Self-Driving' (FSD), is continually improving, currently able to complete most driving tasks most of the time, but still requires human supervision. Waymo, a subsidiary of Alphabet (GOOGL.O), has completed over 150,000 rides in self-driving taxis weekly and plans to expand to more cities by 2025.
As technology matures, Ives and many Wall Street analysts predict that the Trump administration's policies will make it easier to provide autonomous driving services. 'We believe Tesla's journey towards a $2 trillion market capitalization within the next 12 to 18 months has already begun,' Ives wrote in the report.
Ives is a long-time bull on Tesla, always giving it a 'buy' rating. However, what makes this target price unusual is that it addresses a 'peculiar' situation that Tesla's stock price has recently faced.
As of Monday's pre-trading, Tesla's stock price has risen 73% since the election on November 5, with a year-to-date increase of 76%. This post-election surge is so rapid that the stock price has exceeded the highest target price set by major U.S. brokerages. Before Ives' report, Wall Street's highest target price was set at $420 by Daiwa Securities analyst Jairam Nathan.
Such a situation exceeding Wall Street's highest target price is extremely rare. While it's difficult to find detailed historical data, prior to November 2021, the last time Tesla's stock price exceeded $400 was at the end of 2021, when only a few target prices reached $467, slightly above the peak in November 2021 (close to $410).
Now, investors finally see a target price above last Friday's closing price of $436.23, which will undoubtedly give them some comfort. But time will tell if this is enough to sustain Tesla's epic price rebound.
As of Monday's trading close, Tesla's stock price has risen about 86% year-to-date, leaving about 11% room to reach Ives' new target price of $515.
Article reposted from: Jin Shi Data