Shares of Tesla (NASDAQ: TSLA ) appear to have gotten their mojo back. At least, that’s what analysts from both Morgan Stanley and Wedbush are saying.
Over the past five days, Tesla shares have exploded over 26 percent, approaching what would be their highest price of the year if they are able to gain just two more dollars.
The recovery is exactly what the Tesla bulls were looking for. Now, Wedbush analyst Dan Ives is responding to the strong week, boosted largely by a second-quarter delivery pace and potentially strong power division numbers, with a new price target for Tesla.
Mojo returns for Musk
Wedbush has raised its price target to $300 from $275, highlighting a “major turning point” in the Tesla bull case.
Tesla beat delivery expectations by nearly 6,000 units when it reported second-quarter numbers yesterday, led strongly by the Model 3 and Model Y, as anyone who’s been following along for the past few years would expect.
Elon Musk’s Tesla Brand Custom Nike Sneakers (Credit: DMcustomSneakers via Instagram)
Ives believes that Tesla’s stock explosion has been catalyzed by this, but also by the fact that the company is “the most underrated AI play in the market” as Robotaxis Day approaches:
“The key for Tesla stock is the Road recognizing that Tesla is the most underrated AI play in the market in our view with a historic Robotaxis Day ahead for Musk and Tesla on August 8 that will pave the yellow brick road to FSD and an autonomous future. .”
Ives has always been bullish on Tesla, but was more than willing to admit that a shaky start to 2024 was enough to worry some investors. However, Tesla’s long game may be the best strategy for investors as the company moves closer to autonomy and its full self-driving package solution, which is the main driver behind more value for the stock going forward.
Bull Case for Tesla at $400
Ives and Wedbush also upgraded their bull case for Tesla stock to $400.
This is largely driven by and entirely dependent on the autonomy of Tesla’s solution and FSD as a whole, which could propel the company back to the elusive $1 trillion valuation, a club the automaker was once part of:
“We believe that in a case scenario, the Tesla FSD share/segment could be worth as little as $1 trillion. We continue to believe that Tesla is more of an artificial intelligence and robotics play than a traditional car company….now the rubber meets the road as the Street predicts August 8 as a pivotal day for Tesla’s story.”
Ives reiterated in this note, as he did with the first note on Tuesday, that he and Wedbush believe the worst is in the rearview mirror as Tesla continues into 2024. With Musk’s pay package dilemma out of the way and the company at least seeing an increase from the first quarter, investors have less to worry about than before.
Of course, there’s still overshooting of year-over-year delivery cuts, but Tesla is essentially countering that theory with its “between two growth waves” narrative. Alerting investors to this earlier this year was a good play for the company, but it will need to execute with its next-generation platform and Robotaxi over the next few years to keep concerns to a minimum.
Wedbush maintained an ‘Outperform’ rating and sent the price target to $300 from $275.
