Wedbush analyst Dan Ives released on Tuesday a new research note ahead of Tesla‘s earnings results report scheduled for Wednesday, saying that the company is now “at a positive crossroads.”
According to the analyst, “the set-up into Tesla earnings” is now a “dramatically different one” than what the company faced in the first quarter of the year.
A few days before the EV maker reported its first quarter financial results in April, the Tesla bull had called out on the need of a “turnaround vision” for the company.
By then, Elon Musk was still the head of the Department of Government Efficiency (DOGE), working with the Trump Administration.
“While on the April earnings call the big focus was Musk officially leaving the Trump Administration and pressure to refocus on being CEO on Tesla,” Ives reminded, “now investors are seeing more of a ‘wartime CEO’.”
The analyst also cited the Robotaxi expansion and “demand stabilization” as reasons for his bull stance, as he reiterated Wedbush’s Outperform rating on the stock.
The firm has a $500 price target on Tesla, which implies an upside potential of 52.2% based on Monday’s close at $328.49. The stock has surged 33.2% over the past twelve months, but lost 18.7% year to date.
“While near-term and this quarter the numbers are nothing to write home about, we believe investors are instead focused on the AI future at Tesla,” Ives added, highlighting “a motivated Musk” driving the company.
The Wedbush analyst sees Elon Musk “laser focused on the Robotaxi expansion,” not only in Austin but with more cities to follow.
In June, the analyst said that the robotaxi launch was “one of the most important for Musk and Tesla in its history as a company.”
Last week, Tesla expanded the geofenced area of its robotaxi service in Austin, doubling the original service zone introduced in late June when the service was launched.
The company’s CEO has also mentioned that the ride-hailing service is “probably” coming “in a month or two” for the Bay Area, “as soon as the regulators approve” it.
Dan Ives considered that “front and center for investors are the AI initiatives happening under the hood of Tesla,” with the Wall Street paying attention “for any more direction around a Tesla investment into xAI.”
Elon Musk said last week that, if it was up to him, “Tesla would have invested in xAI long ago.” According to a post by the CEO on X, the company “will have a shareholder vote on the matter.”
The chief executive had previously published an informal poll on X asking whether Tesla should invest $5 billion in his AI start-up.
Dan Ives had mentioned the collaboration between Tesla and xAI in a note published earlier this month, where he suggested the Board of Directors gave Elon Musk 25% voting control, which would clear the path “for xAI merger.”
The analyst urged the Board to adopt several measures that included an “oversight on political endeavours” and allocated time for the company, as a way for the CEO to focus on the EV maker and not on politics.
On Tuesday’s note, Ives says “there are a number of other key endeavors” in the future for Tesla, including the Optimus robot. “It starts with autonomous then robotics is the view,” he stated.
To Wedbush, autonomous valuation “is worth $1 trillion alone to the Tesla story over the next few years.
In contrast, GLJ Research analyst Gordon Johnson maintained a ‘Sell’ rating and $19.05 price target on Tesla.
Johnson cautions that Tesla is likely to experience a sharp decline in fundamentals and a return to negative free cash flow by the fourth quarter, which could unsettle long-term investors amid high valuation concerns.
