Written by Cláudio Afonso | LinkedIn | X
Despite saying Tesla stock is “still” the firm’s “#1 Buy-and-Hold idea,” Piper Sandler analyst Alexander Potter said in a new research note released on Tuesday that the first half of 2025 “may be choppy.”
The firm raised its price target significantly by $185 to $500.00 while reaffirming an Overweight rating on the stock. As of the time of writing, the stock is trading 3% lower at $413.
Piper Sandler’s team noted that “investors are starting to appreciate Tesla’s potential in “real-world” A.I., and as a result, PMs are more willing to entertain upside scenarios.”
“That said, the long-term narrative often takes a back seat when current-year estimates are falling, and in this regard, the outlook is highly uncertain,” Alexander Potter wrote.
The firm says Tesla’s thesis will “ultimately depend” on the Optimus robots and on “neural-net-training-as-aservice.”
“The problem is, these nebulous revenue streams are difficult to incorporate into a DCF,” the analyst explained before informing that Piper Sandler is shifting to a P/E-based valuation methodology.
“Our $500 price target is based on 120x FY26E EPS, which is in the top-half of TSLA’s historical trading range,” Potter said in the new research note. “By one year from now, investors should have greater clarity re: new product cadence; this should allow them to focus on other, more exciting topics (e.g. rising FSD efficacy and the implications for Tesla’s A.I. ambitions).”
Tesla increased earlier this week its inventory discounts for its new Cybertruck model in the United States, with reductions of up to $2,110. The model was recently integrated into the $7,500 Tax Credit list, although it remains unclear whether President Donald Trump will eliminate it.
Written by Cláudio Afonso | LinkedIn | X
