Tesla: Why Analysts Think It Could Jump Another 47%

Shares of Tesla (NASDAQ:TSLA) Inc. opened just over $350 on Tuesday and started up after the long Memorial Day weekend with some seriously strong momentum.

The stock is now up over 55% from its April low, with the last two weeks marked by tight consolidation and base building — the kind of setup technical traders love heading into a potential breakout.

Now, a powerful new endorsement is adding fuel to the fire. Late last week, Wedbush analyst Dan Ives reiterated his Outperform rating and raised his price target from $350 to $500, a rare 42% single-shot increase.

That implies an almost 50% upside from current levels and would mark a fresh all-time high for the stock.

Autonomous Ambitions Drive the Bull Case

Ives is among the most bullish voices on Wall Street when it comes to Tesla's long-term potential, particularly as it relates to artificial intelligence and autonomous driving. He argues that the company is on the cusp of a new growth era, with AI at the heart of it. In his view, the upcoming launch of Tesla's robotaxi platform could be the unlock that reframes the entire valuation.

"We believe Tesla remains the most undervalued AI play in the market today," Ives wrote, calling the coming quarters the start of a golden age for autonomy. He also believes regulatory support under a Trump administration could fast-track approval of key initiatives, helping Tesla overcome some of the friction that has slowed its autonomous push to date.

In his latest note, Ives said the AI and autonomy opportunity alone could be worth $1 trillion — enough to justify a path toward a $2 trillion valuation by the end of 2026. While that projection may sound aggressive, it reflects a growing belief among bulls that Tesla is more than just a car company. It's now being grouped alongside tech giants like NVIDIA (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT) as one of the best long-term AI plays on the board.

Musk’s Media Blitz Reinforces the Vision

The latest surge in sentiment also follows Elon Musk's high-profile interview with CNBC, where he doubled down on Tesla's ambitions across autonomy, humanoid robotics, and artificial intelligence. Musk confirmed that a significant portion of Tesla's future growth will hinge on software, particularly in the form of Full Self-Driving and AI agent development.

That messaging appears to have resonated with institutional investors, particularly as Tesla reclaims the narrative around its strategic vision after a rocky start to the year. Musk also pledged to reduce his time spent on government duties by the end of May, clarifying that his commitment to Tesla remains intact despite ongoing involvement with the Department of Government Efficiency.

Some Risks Remain for Tesla

That said, not everyone is convinced the rally can last. While the U.S. narrative is heating up, Tesla's grip on the European EV market is slipping fast. In April, the company sold just 7,261 vehicles across the region, a 49% year-over-year decline, even as the broader EV sector grew more than 34%. Year-to-date, Tesla's European sales have dropped nearly 40%, underscoring the severity of the trend.

Political tensions aren't helping. Musk's alignment with former President Trump and his expanded political role has sparked protests at Tesla dealerships in multiple countries. Brand perception is deteriorating in key European markets, and competition is intensifying. Chinese automaker BYD (SZ:002594) recently overtook Tesla in European EV sales, while legacy manufacturers like Volkswagen (ETR:VOWG_p) and Mercedes are gaining ground with refreshed lineups and aggressive pricing.

Product fatigue is also said to be creeping in. While a refreshed Model Y has helped stabilize volumes, Tesla has not yet unveiled a new mass-market vehicle — something analysts increasingly cite as critical for driving new growth in the face of stiffening competition.

Can the Momentum Offset Global Concerns?

Tesla is a stock with two stories right now. In the U.S., it is regaining momentum thanks to a powerful AI narrative, bullish price targets, and improving sentiment. But globally, especially in Europe, the company faces real friction.

Whether the next leg higher materializes quickly will likely depend on upcoming developments in autonomy, especially any updates tied to the Robotaxi platform in June. If that narrative takes hold, Tesla could continue to defy the skeptics and move closer to Wedbush's $500 target.

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Written By: MarketBeat.com