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Tesla (TSLA) receives “Buy” rating, $450 price target from Jefferies Financial Group

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Just days after receiving a higher price target from CFRA and a vote of approval from New Street Research, Tesla (NASDAQ:TSLA) has received yet another round of support from Wall Street. In a recent note to its clients, Jefferies upgraded Tesla from “Hold” to “Buy,” while raising the company’s price target from $360 to $450, representing a 24% gain from the stock’s $363.06 closing price on Thursday. 

In a note to clients on Friday, Jefferies analyst Philippe Houchois stated that Tesla’s strengthening balance sheet, its resilient growth relative to the rest of the auto industry, as well as the company’s improving productivity, bodes well for the electric car maker as a whole. Houchois noted that among the carmakers in the industry today, Tesla might be the only one that would avoid a “volume zero-sum game” or “negative margin trade-off in EVs.”

“Tesla should continue to stand out with broader price points, battery security of supply, product edge and a brand that transcends the volume/premium divide. In short, in the year ahead we think only Tesla will avoid a volume zero-sum-game or negative margin trade-off in EVs,” Houchois said.

While Houchois remains optimistic about Tesla’s chances as a self-sustaining business, the Wall Street analyst nevertheless stated that it might be better for Elon Musk to reduce his direct involvement with the company’s day-to-day operations. Instead, the Jefferies analyst noted that Musk should consider focusing on projects such as  “product/vision/other ventures.”

“Elon Musk’s erratic behavior makes us wonder if he might be considering reducing his direct involvement in Tesla to focus on product/vision/other ventures. We think such a move might be better suited to Mr. Musk’s talents than driving manufacturing efficiency and would benefit Tesla,” Houchois wrote.

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Apart from Jefferies’ upgrade to a “Buy” rating, Tesla also received a higher price target from another Wall Street firm, Wolfe Research. In a recent note, Wolfe analyst Rod Lache gave TSLA an “Outperform” rating while raising the company’s price target from $410 to $430 per share, on account of the electric car maker’s capability to sustain the impressive performance it displayed in the third quarter. 

As Wall Street adopts a friendlier stance on Tesla, the company’s shares have proven resilient on the stock market. On Thursday alone, TSLA shares ended at $363.06, even trading as high as $371.25 on Friday’s pre-market. The stock’s price as of Friday’s pre-market places it above a critical milestone, higher than the $359.88 conversion price on $920 million in convertible bonds that are due this coming March. The recent levels of Tesla stock also places it close to levels that were last seen back in August, during the first phases of Elon Musk’s “funding secured” fiasco.

Tesla seems to be preparing itself for yet another delivery and production blitz this December, as the company attempts to deliver as many vehicles as it can to customers in the United States, whose $7,500 federal tax credit is set to expire by the end of the month. Amidst the company’s plans to bring the Model 3 to international markets, as well as its aim of producing the $35,000 base variant of the electric sedan, Tesla’s coming quarters would likely be even more historic. 

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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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Investor's Corner

Tesla tailwinds could drive momentum-filled finish to 2025: analyst

Tesla is heading toward some momentum to finish out the year, one Wall Street firm believes.

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Credit: @heydave7/X

Tesla has some tailwinds that could drive it toward a momentum-filled finish to the year, one Wall Street analyst is predicting.

The tailwinds are joined by some minor risks that have impacted the broader electric vehicle market, but overall, this firm believes Tesla has many catalysts moving forward.

Emmanuel Rosner of Wolfe Research believes that Tesla has plenty of things that could drive the stock upward as we approach the end of the year. With Q3 well underway, Tesla has about five months of catalysts to rely on to erase the roughly 18 percent drop in stock price it has so far this year.

At first glance, it is easy to see the things that would have investors bullish on Tesla for the rest of 2025 and even beyond. Initially, the Robotaxi launch and expansion, which spread to Northern California last night, provide potentially huge tailwinds for the company moving forward.

Tesla expands Robotaxi operation to California’s Bay Area

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Along with that, and slightly related, are the advancements in Full Self-Driving that the company has made over the past few months.

This includes the potential launch of the FSD suite in regions like Europe and Australia, where the company believes it will make some progress on regulatory approval in the coming months.

Finally, Wolfe says the company’s Optimus project, which is expected to enter scale production sometime next year, is the third catalyst for Tesla moving forward.

With these three projects in motion, Tesla truly can begin to work on rebounding from a rough 2025 on the market.

Rosner writes:

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“This name trades more around the narrative than the numbers. And net-net, we tactically see an improving narrative from here. Tesla has several catalysts coming up w/r/t FSD and Robotaxi, including an expansion of their AV service into several new U.S. markets (San Francisco, Nevada, Arizona, Florida, etc.). The company plans to unlock hands-free/eyes-off autonomy for FSD owners in select U.S. locations by YE25. Supervised FSD in China and Europe is expected to launch over the next ~12 months. And, Optimus is expected to enter scale production in 2026.”

Tesla is currently trading around $310 at around 3:20 p.m. on the East Coast.

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Tesla Robotaxi execution should lead to valuation ‘far exceeding current levels’: analyst

RBC Capital bumped its price target on Tesla stock slightly from $319 to $325.

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Credit: @TerrapinTerpene/X

Tesla’s Robotaxi platform is the primary focus for the automaker currently, and based on what has been outlined by the company as goals for the project, one firm is saying that the company’s valuation should “far exceed even current levels.”

The Robotaxi is a self-driving ride-hailing service that Tesla plans to implement in current and future vehicle builds. CEO Elon Musk and other executives have said that “the vast majority of the Tesla fleet that we’ve made is capable of being a Robotaxi,” thanks to its development of Over-the-Air software updates that increase the capability of the vehicle with a simple download.

Currently, the Robotaxi platform is only active in a portion of Austin, Texas, but Tesla is expanding to other markets, including California, Nevada, Arizona, and Florida. California will be the next market to open its doors to the Tesla Robotaxi platform.

But the name of the game is execution, and that’s what Tesla is aiming for in a timely fashion. If it can come through on all of its current goals, its valuation could explode, and one firm is holding steady on that narrative as Tesla continues to work toward expanding Robotaxi.

On Tuesday, RBC Capital analysts bumped their price target on Tesla shares (NASDAQ: TSLA) to $325 from $319, primarily due to the Robotaxi expansion and its success:

“Should Tesla be successful on all of its goals, its valuation could far exceed even current levels. The Austin Robotaxi launch has been better than many feared, and the company is looking to expand in more cities.”

There are some risks to Tesla’s narrative, but they fall outside the scope of what the company can control. In relation to Robotaxi, regulatory hurdles remain. Some regions may be slower than others to give Tesla the proper licensing to operate in their jurisdiction. This could slow the pace of Robotaxi expansion, bringing some overhang to the story.

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Additionally, Tesla is fending off narratives of slowing demand, and the White House’s decision to revoke the $7,500 EV tax credit from consumers could temper sales past Q3.

Nevertheless, Robotaxi is where Tesla’s true value seems to be focused. Successfully launching a driverless ride-sharing platform is where the company is putting all of its eggs, and revolutionizing passenger travel is where the focus lies.

RBC Capital’s note continued:

“Regulatory hurdles remain, however. Further, we expect the end of IRA credits and high levels of used EV inventory to pressure the auto business for the next several quarters.”

The slight price target bump puts RBC Capital’s expectations near where the stock is trading, as it is currently priced at around $320 at 9:54 a.m. on the East Coast.

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Elon Musk shares details on Tesla AI6 production deal with Samsung

Tesla is already laying the groundwork for the ramp of its next-generation products.

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tesla-supercomputer-pre-dojo
Credit: Tim Zaman/Twitter

Elon Musk has provided some details about Tesla’s AI6 production deal with South Korean tech giant Samsung. As per Musk, Samsung’s upcoming Texas fabrication facility will be dedicated to the production of Tesla’s AI6 chip.

Musk’s update suggests that Tesla is already laying the groundwork for the ramp of its next-generation products like the Cybercab and Optimus.

Samsung AI6 production reports

On Sunday, Bloomberg News claimed that Samsung will be producing semiconductors for Tesla in a $16.5 billion deal. As per the report, Samsung is currently producing Tesla’s AI4 chip, and the deal will help the South Korean tech giant gain some ground back from competitors in the semiconductor market.

Elon Musk confirmed the news on X, stating that the $16.5 billion is actually just the bare minimum. As per Musk, the deal with Samsung will likely be “much more than that.” And in a later comment, Musk clarified that the actual output of Samsung’s Tesla AI6 plant will “likely be several times higher” than what has been reported.

Musk shared a critical detail that would likely allow Samsung to maximize its AI6 output. “Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house,” Musk wrote in his post.

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Elon Musk on AI5 and AI6

Tesla currently produces vehicles with its AI4 chip, which is produced by Samsung. As per the CEO, Tesla’s AI5 chip, which just finished its design, will be produced by TSMC. The AI5 chip will be produced initially in Taiwan, and then in Arizona, the CEO noted.

Elon Musk’s comments about AI6 and Samsung’s output suggest that Tesla is really preparing to enter a stage in its growth that involves production at a scale that’s never been seen before. Tesla’s speed is quite notable, though it seems safe to assume that the actual rollout of AI6 will still be a few years away. 

In a few years, Tesla will probably be mass producing the Cybercab and Optimus, as well as more affordable vehicles that will likely see more adoption from mainstream customers. This means that Samsung’s AI6 ramp will likely be just in time to support Tesla’s outputs for its Optimus bots, its Cybercabs, and its mass market affordable cars.

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