Tesla shares closed at a fresh all-time high Wednesday following a series of solid China EV sales and a big price-target upgrade from a top Wall Street analyst.
Tesla (TSLA) shares have surged nearly 75% since Election Day and more than 95% since the EV group unveiled its robotaxi, dubbed the Cybercab, at a gala event in Los Angeles in early October.
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Investors are betting that CEO Elon Musk's close relationship with President-elect Donald Trump, as well as his role in suggesting cuts to the federal government's $6.8 trillion budget, will give the group an edge in regulation and, possibly, cover from U.S. tariffs.
Meantime, Tesla's robotics division is also capturing investor interest as it begins to scale the Optimus humanoid robot for industrial use, as well as the AI technologies it's using to power its autonomous-driving ambitions.
Legacy EV sales are also improving, particularly in China, where Tesla had its best month of the year in November, selling 73,000 units amid ongoing demand for its Model Y sedan, and shifting another 21,900 units over the first week of December.
AI demand driving Tesla's growth
Musk himself in fact forecast that Tesla would grow EV sales 20% to 30% next year and vowed to launch a lower-priced model over the second half of 2025.
The group's collective momentum has also triggered a host of ratings changes on Wall Street, with the latest coming Wednesday from Goldman Sachs analyst Mark Delaney.
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Delaney, who lifted his price target on the group by $95 to $250 a share, saw potential for weakness in Tesla's legacy EV division but touted its position in both autonomous driving and robotics.
"While we see some fundamental headwinds to the core auto business over the near to medium term and see valuation as full, we also believe the stock could remain at a higher multiple to reflect the long-term opportunity tied to [Full-Self-Driving]/robotics given broader market interest in potential AI beneficiaries," Delaney said.
$TSLA is up 84% over the last 65 trading days, or since the 10/11 ‘We, Robot’ event. As a comparison, the rest of the Mag 7 is up, on average, 10%, and the Nasdaq up 8%.
— Gene Munster (@munster_gene) December 10, 2024
Tesla’s run is a direct result of a renewed belief in autonomy and future robotics. As Franz said at ‘We,…
Tesla rivals rethink EV production
The analyst also noted that while Tesla sales have been trending lower in its three biggest regions, it could see a more stable share of the broader market as "several of the larger auto [original-equipment manufacturers] take a more selective approach to the EV market given likely reduced emissions requirements."
Earlier this week General Motors (GM) exited its nascent move into the robotaxi market through its majority-owned Cruise business, citing the "considerable time and resources that would be needed to scale the business."
Ford Motor (F) , meanwhile, is cutting jobs in Europe and shifting its focus on internal-combustion-engine vehicles amid mounting losses in its EV division and the expected cut to EV tax credits from the Trump administration next year.
Related: Analyst overhauls Tesla stock price target as 'top pick' in sector
"While we believe that the company is in a leading position in the domains of platforms & power, and in the broader clean mobility space (including EVs, storage, software, and charging), we expect Tesla will face headwinds in the core auto business over the near to medium term (including slower global EV demand, and pricing pressure)," Delaney said.
Tesla shares closed at an all-time high of $424.77 each Wednesday, after rising 5.93% on the session to extend their 2024 gain to around 71% and peg their market value at $1.33 trillion.
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