Baird reaffirmed its bullish price target on Tesla this Tuesday, highlighting autonomy developments as key potential drivers for the stock in 2026.
Based on Monday’s closing price, the $548 target implies a potential upside of 19.2%.
The firm’s price target on the Elon Musk-led company was sharply increased in mid-September — from $320 — representing one of the most bullish views on Tesla then.
Stock Performance
In a new research note published on Tuesday, Baird analyst Ben Kallo wrote that “despite a sluggish start to the year,” Tesla has gained 21% year-to-date and 7% in the last month, above the S&P 500.
In the first four months of the year, the company’s shares lost more than half of their value, trading at their lowest on April 7, when they closed at $214.25.
The stock was impacted by US policy and CEO Elon Musk’s political activities then.
However, Tesla shares rebounded in the following months, driven by new product launches and anticipation of autonomy-related projects.
From September 1 through December 1, the share value increased by approximately $100 (or 30%), rising from $329.36 to $429.36.
Throughout December, a sharp increase led the stock to a new all-time high, first on December 16 — when it surpassed the previous record of $488.54 set a year before.
On December 23, Tesla traded near $500, at $498.83, before dropping to $488 at the end of the session.
In the past week, the stock lost about 6%.
Outlook
According to Ben Kallo, Baird continues to see Tesla as a “core holding” for their coverage, with catalysts for 2026 including the “broader robotaxi rollout, new product launches, and incremental details on Optimus commercialization.”
On the Robotaxi front, the analyst expects expansion into new cities in the US and overseas, as he estimates Tesla will receive approval to “begin operations in China/EU (among others).”
Musk said in the latest Annual Shareholder Meeting in early November that full approval of the software in China — where it is only partially available — is expected in the first quarter of 2026.
European safety regulators are currently reviewing the system, with the first demonstration meeting scheduled for February in the Netherlands.
However, approval of the software is still uncertain and may or may not be granted at that time.
Kallo noted that updates on Optimus production and “incremental details on the timeline to commercialization” are also expected to be given next year.
The company plans to begin mass production of its third-generation Optimus robot in 2027, and construction is already underway on a dedicated manufacturing facility at Giga Texas.
The analyst did not rule out the upcoming launch of the Tesla Semi with “higher volumes” and expects “continued growth in the Energy business.”
Additionally, Kallo also said that “non-Tesla items” could influence the stock, including the upcoming IPO of Elon Musk’s SpaceX.
