Tesla (NASDAQ:TSLA) shares are once again enjoying a Trump-backed boost, climbing ~6% on Monday. The surge followed a Bloomberg report indicating that Trump’s transition team has informed advisors that the Transportation Department under the new administration will prioritize creating a federal framework for fully autonomous vehicles.
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It’s hardly surprising that Tesla bulls reacted with enthusiasm to the news. Among them, Wedbush analyst Daniel Ives emphasized that this marks a significant milestone in easing U.S. regulations on self-driving cars. He also noted that such a shift would provide a substantial boost to Tesla’s autonomous and AI vision as it heads into 2025.
“Musk’s significant influence in the Trump White House is already having a major influence and ultimately the golden path for Tesla around Cybercabs and autonomous is now within reach with an emboldened Trump/Musk strategic alliance playing out in real time and very in line with our thesis,” Ives opined.
With Trump calling the shots, Ives now fully expects these “key initiatives” to be fast-tracked, as the complex federal regulations that Musk and his team have faced in recent years regarding FSD (full self-driving) and autonomy are likely to be streamlined under the new administration.
Ives thinks Tesla is now looking at a $1 trillion opportunity in AI and autonomous driving, and that puts the company on track to a $1.5 trillion – $2 trillion valuation over the next 12 to 18 months. The growth will be driven by the adoption of FSD and “autonomous penetration” within Tesla’s existing customer base, while the Cybercab’s launch will represent “the golden goose.”
Looking at the bigger picture, Ives says that over the past decade, he has never considered Tesla to be just a car company. Instead, the analyst has always viewed Tesla as a “leading disruptive technology global player.” The first phase of this “grand strategic vision” has come to life over the past five years. Now, the next phase of Tesla’s broader strategy is unfolding — the autonomous and AI era. With this in mind, Ives makes the case that Tesla is still the “most undervalued AI play in the market today.”
It will come as no surprise to learn, then, that Ives rates Tesla shares an Outperform (i.e., Buy), backed by a Street-high $400 price target. The implication for investors? Upside of ~16% from the current share price. (To watch Ives’ track record, click here)
Ives is a big TSLA bull but that’s not the case with most of the analysts covering the EV leader right now. The stock only claims a Hold (i.e. Neutral) consensus rating, based on a mix of 16 Hold, 11 Buy and 8 Sell recommendations. The majority also think the shares are significantly overvalued; at $207.83, the average target factors in a 12-month decline of ~39%. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
