Analyst calls self-driving tech and ride-hailing ambitions key to long-term valuation
Tesla (TSLA) shares climbed 3% in early trading Monday, bouncing back after a volatile week, as investment bank Stifel raised its price target on the stock and reaffirmed a bullish stance. Analyst Stephen Gengaro increased his target to $508 from $483 while maintaining a Buy rating, emphasizing Tesla’s artificial intelligence–driven Full Self-Driving (FSD) technology and its emerging robotaxi service as central to future growth.
“We believe that Tesla’s AI-based Full Self-Driving technology and Robotaxi initiatives are critical to the story and a large part of our valuation,” Gengaro wrote in a client note. He added that Tesla’s FSD software continues to improve in real-world performance, particularly in smoother decision-making and features such as autonomous parking.
Gengaro also highlighted Tesla’s Cortex AI training cluster at Giga Texas, which he believes will accelerate progress on FSD capabilities. His own experience with the software, he noted, shows steady improvement in recent updates.
The analyst remains optimistic about the rollout of Tesla’s robotaxi network, currently operating in Austin and the San Francisco Bay Area. Tesla plans to expand the service to eight to ten metropolitan regions by the end of 2025, with safety drivers still present during the pilot phase.
While Stifel sees long-term promise in Tesla’s AI ventures, Gengaro flagged concerns about the automotive division’s profitability, citing falling gross profit per vehicle and “flattish” average selling prices. However, he believes the new standard Model Y and Model 3 will help cushion margins by offsetting lost EV tax credits.
Monday’s gain followed a 5.9% decline last week, when Tesla briefly fell below $400 before closing Friday at $404.35. The rebound comes despite headlines surrounding Elon Musk’s record-breaking compensation package and Peter Thiel’s 76% reduction in Tesla holdings — suggesting renewed investor faith in the company’s AI-led future.
You might like this article:Intel’s Fight for Relevance: Can the Chip Giant Hold Off AMD’s Rising Tide?
