Tesla could reach $2 trillion in market cap by end of 2026 as autonomous era begins in Austin, says Dan Ives
Wedbush's Dan Ives believes that Tesla "remains the most undervalued AI play in the market today" and could roughly double its value by the end of next year. In a Friday note, the analyst reiterated his outperform rating and $500 price target on the electric vehicle maker. Shares of Tesla closed at $322.05 on Wednesday, meaning that Ives' forecast signals upside of more than 55%. Tesla has struggled this year, plunging more than 20%. TSLA YTD mountain TSLA YTD chart Still, Ives remains bullish on the stock, noting that the "golden era of autonomous for Tesla" officially begins Sunday in Austin with the launch of roughly 20 Model Y robotaxis. He said the rise of autonomous vehicles could drive Tesla's market cap to $2 trillion by the end of 2026 from roughly $1 trillion as of Wednesday's close. It's expected that Tesla will steadily ramp up its robotaxi service to roughly 25 U.S. cities in the next year. Ives added that Tesla's full-scale production of Cybercabs, beginning next year, will be its next key step in monetizing the autonomous vision of the future. "Taking a step back we view this autonomous chapter as one of the most important for Musk and Tesla in its history as a company ... as we believe the AI future at Tesla is worth $1 trillion to the valuation alone over the next few years," Ives wrote. "There will be many setbacks ... but given its unmatched scale and scope globally we believe Tesla has the opportunity to own the autonomous market and down the road license its technology to other auto players both in the U.S. and around the globe." The analyst added that he expects President Donald Trump to help clear the federal regulatory spiderwebs that might have troubled Tesla CEO Elon Musk's autonomous ambitions in the past. "The BFF/frenemy situation with Musk and Trump has created a soap opera on this front but ultimately Trump wants the U.S. to stay ahead of China in this AI Arms Race and autonomous is a key factor in who wins AI ... with Tesla playing a major role on robotaxis," Ives said. "We expect over the coming months an easing of the federal framework for autonomous with more power going to the federal regulators with states having less authority on the autonomous rules/approvals/framework." Tesla shares rose more than 1% in the premarket. Analysts are split on the stock. Of the 55 who cover it, 25 rate it a buy or strong buy, according to LSEG. Another 19 have a hold rating on Tesla, while 11 assigned underperform or sell ratings.
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