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Wall St. sends Tesla (TSLA) stock soaring 10% amid renewed confidence in profitability

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Tesla shares (NASDAQ:TSLA) are rallying after the electric car maker beat Wall Street’s revenue estimates by posting $4 billion in revenue, consisting of $3.36 billion from its automotive business and $374 million from its energy and battery storage division. Topped off by a successful earnings call that seemingly restored investors’ positive sentiments towards the company, Tesla appears to have finally hit a turning point in its struggle to achieve profitability.

Tesla’s second-quarter earnings call saw a more restrained Elon Musk. During the Q&A session, Musk stated that Tesla would start showing profits each quarter going forward, while maintaining that the company would not need an equity capital raise. Musk and Tesla’s executives also noted that high-profile projects, such as Gigafactory 3 in Shanghai, would not have as much CapEx as its other facilities like Gigafactory 1 in Nevada. According to CTO JB Straubel, the lessons that Tesla learned in its US facilities over the years will be applied to all of the company’s future projects.

“We found a surprising amount of ways to improve efficiency and speed and density as well in Gigafactory 1. And all those lessons will absolutely be shared with Gigafactory 3. The teams are already, of course, beginning to collaborate and start to do this more efficiently with less cutbacks than last time,” Straubel said.

The company’s encouraging numbers and positive earnings call aside, one thing that truly stood out was Musk’s apology to Wall Street analysts Toni Sacconaghi from Bernstein and Joseph Spak of RBC Capital Markets, who were cut off during the first-quarter earnings call. Musk noted that while he was incredibly tired then, there was “no excuse” for his behavior.

Coupled with the company’s better-than-expected financials, Musk’s apologetic, humble behavior in the earnings call appears to have rejuvenated investors’ sentiment about the company. During after-hours trading on Wednesday, Tesla stock surged 8.5%, adding about $4.75 billion the company’s market cap. On Thursday’s pre-market, Tesla stock was up 8%, maintaining its momentum. In a note to clients on Wednesday, Keybanc analyst Brad Erickson dubbed Musk’s apology as “maybe the most valuable apology of all time.”

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“Elon Musk apologized multiple times for his inappropriate behavior on last quarter’s call. TSLA’s forward commentary was mostly better than feared and the CEO worked to restore some faith and credibility with investors that he can be a plus to the investment narrative, not a minus,” Erickson wrote.

While Tesla’s earnings of -$3.06 per share were slightly worse than analyst estimates of -$2.92 per share, Piper Jaffray analyst Alexander Potter stated in a note to clients on Wednesday that Q2 2018 could be a turning point for the company. Potter also raised his price target for TSLA to $389 from $369, representing 29% upside to Wednesday’s close.

“This could be the start of something big. A few years from now, investors may conclude that 2Q18 was the quarter in which Tesla cemented its position as a truly formidable player in the global automotive market,” the analyst said.

Even Goldman Sachs, which has a Sell rating on Tesla stock, admitted that the second quarter was “solid” for the electric car maker, considering that automotive gross margins, cash burn, and ending cash balance were better than expected.

“This was a positive quarter. Automotive gross margins, cash burn, and ending cash balance were better than expected. In addition, the company may have turned the corner on its historical operational misexecution. We see the second quarter as a positive step for Tesla as a manufacturing organization, but a step that requires continued forward momentum in cost control, operating efficiency, and ultimately positive cash flow.”

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Tesla stock opened strong on Thursday, up 9.22% and trading at $328.44 per share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Mizuho raises Tesla (TSLA) price target on stronger 2026 outlook

Mizuho also retained Tesla’s “Outperform” rating despite short-term industry challenges.

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Credit: Tesla Europe & Middle East/X

Mizuho Securities has lifted its price target for Tesla (NASDAQ:TSLA) shares to $450 from $375, citing a more optimistic view of the electric vehicle market in 2026. 

The firm stated that potential tariff headwinds appear less severe than earlier expected, while EV production volumes are trending higher across major automakers. Mizuho also retained Tesla’s “Outperform” rating despite short-term industry challenges.

Mizuho’s take

Mizuho analysts now forecast Tesla will deliver about 1.91 million vehicles in 2026, slightly down from their previous estimate of 1.95 million but still above Wall Street consensus. The firm pointed to Tesla’s planned lower-cost “Model 2” and potential Robotaxi launches as key drivers for growth over the next two years.

“We see TSLA maintaining key leadership in the U.S. BEV market despite some near-term challenges,” Vijay Rakesh, managing director at Mizuho, wrote in a research note. 

The note also highlighted Elon Musk’s recently approved compensation package and his $1 billion stock purchase, which Mizuho believes could align incentives with Tesla’s long-term projects, as noted in a Yahoo Finance report. These include advancing autonomous driving technology and pushing development of humanoid robots, both of which remain central to Musk’s vision of the company’s future.

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Mizuho is not the only firm that has cited Tesla’s long-term projects and the company’s leadership position in the AI and auto sector. In a recent note, Piper Sandler highlighted that despite the growing number of legitimate competitors for Tesla in places like China, the company still has a foundational role in shaping the industry’s direction, particularly in areas such as battery integration, vehicle software, and AI-powered features.

Piper Sandler also noted that competitors still look to Tesla for advancements in real-world AI applications. “Building AI-enabled machines requires data, talent, chips, and engineering prowess. Tesla compares favorably vs. the Chinese on all of these fronts,,” the firm noted.

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Piper Sandler raises Tesla (TSLA) target after China trip, cites robotics leadership

Analysts concluded that Tesla is still the benchmark that competitors rely on for innovation.

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Credit: Tesla Asia/X

Piper Sandler boosted its Tesla (NASDAQ:TSLA) price target to $500 from $400, maintaining an “Overweight” rating after a research trip to China. 

The firm cited Tesla’s leadership in artificial intelligence and robotics as central to its thesis, even as Chinese electric vehicle makers grow more competitive. Analysts concluded that Tesla is still the benchmark that competitors rely on for innovation.

A China visit

During its visit, Piper Sandler met with several Chinese EV manufacturers, many of which are vertically integrated and expanding rapidly. Analysts noted that these “fast followers” represent Tesla’s most significant competitive challenge. However, executives from multiple companies acknowledged Tesla’s foundational role in shaping the industry’s direction, TipRanks stated in a report.

One automaker told Piper Sandler that “without Tesla going from 0 to 1, we can’t go from 1 to 100,” highlighting the Elon Musk-led company’s enduring influence. Analysts said the remarks reflect both admiration and dependence on Tesla’s early innovations, particularly in areas such as battery integration, vehicle software, and AI-powered features.

Tesla’s leadership

Piper Sandler’s report emphasized that while Chinese automakers are formidable in design and production, they look to Tesla for advancements in “real-world” AI applications. Tesla’s focus on autonomous driving and robotics continues to distinguish it from competitors, making the company Piper Sandler’s top investment idea in this space.

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“Building AI-enabled machines requires data, talent, chips, and engineering prowess. Tesla compares favorably vs. the Chinese on all of these fronts,” Piper Sandler analyst Alexander Potter stated in a note. 

Piper Sandler also shared some of its expectations for Tesla this year, stating that it is estimating that the company will delivery ~495k vehicles this third-quarter, possibly attaining a new all-time record. The firm, however, stated that its 2026 outlook for Tesla is shakier, as the EV maker could just hit ~1.9 million units, which could include as many as 350k affordable “Model 2” vehicles.

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Tesla upgraded to Outperform at Baird on ‘physical AI’ outlook

Analyst Ben Kallo also raised Tesla’s price target to $548 from $320.

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Credit: Tesla China

Tesla (NASDAQ:TSLA) received a bullish nod from Baird this week, with the firm upgrading the stock to “Outperform” on expectations that the company is positioned to lead in what it calls the “physical AI” era. 

Analyst Ben Kallo also raised Tesla’s price target to $548 from $320, noting that despite muted quarterly results, shares have gained 24% in the past month, outpacing the S&P 500’s 3% rise.

Long-term milestones

The Baird analyst shared his insights in a note to investors. “Relatively muted stock reactions following a series of less-than-stellar quarters and investor inbounds regarding long-term initiatives lead us to believe focus has increasingly shifted to the future for TSLA. We now expect shares to ‘Outperform’ as TSLA is increasingly viewed as the leader in physical AI,” the analyst wrote in his note.

Kallo also pointed to Tesla’s ambitious roadmap as a key reason for the upgrade, as well as the company’s new proposed compensation plan for CEO Elon Musk. The package ties rewards to ambitious milestones, including the delivery of 20 million vehicles annually, the deployment of 1 million robots and 1 million robotaxis, and 10 million Full Self-Driving (FSD) subscriptions. 

Vehicles, robots, and energy

Baird’s scenario analysis suggested that Tesla could reach a valuation of more than $5.5 trillion by 2035 in its minimum case, with potential upside to $12 trillion and $3,000 per share if milestones are exceeded, as noted in an Investing.com report.

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Beyond Musk’s compensation framework, Baird highlighted multiple near-term catalysts for Tesla. These include potential updates on Optimus, the rollout of more affordable vehicles, new Robotaxi market entries, and an upcoming shareholder vote on Musk’s pay package. Expansion in Tesla’s energy storage and software businesses was also flagged as a growth driver. Kallo also described Tesla as having “lots of irons in the fire,” ranging from the scaling of the Semi to recurring revenue streams tied to software.

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