Investor's Corner
Tesla (TSLA) receives “Buy” rating, $450 price target from Jefferies Financial Group
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.
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.
Jefferies Upgrades Tesla to Buy from Hold; Raises PT to $450 from $360$TSLA #Tesla pic.twitter.com/98NO10BERr
— vincent (@vincent13031925) December 7, 2018
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.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
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Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
SpaceX officially acquires xAI, merging rockets with AI expertise
Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
Investor's Corner
Tesla (TSLA) Q4 and FY 2025 earnings call: The most important points
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Tesla’s (NASDAQ:TSLA) Q4 and FY 2025 earnings call highlighted improving margins, record energy performance, expanding autonomy efforts, and a sharp acceleration in AI and robotics investments.
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Key takeaways
Tesla reported sequential improvement in automotive gross margins excluding regulatory credits, rising from 15.4% to 17.9%, supported by favorable regional mix effects despite a 16% decline in deliveries. Total gross margin exceeded 20.1%, the highest level in more than two years, even with lower fixed-cost absorption and tariff impacts.
The energy business delivered standout results, with revenue reaching nearly $12.8 billion, up 26.6% year over year. Energy gross profit hit a new quarterly record, driven by strong global demand and high deployments of MegaPack and Powerwall across all regions, as noted in a report from The Motley Fool.
Tesla also stated that paid Full Self-Driving customers have climbed to nearly 1.1 million worldwide, with about 70% having purchased FSD outright. The company has now fully transitioned FSD to a subscription-based sales model, which should create a short-term margin headwind for automotive results.
Free cash flow totaled $1.4 billion for the quarter. Operating expenses rose by $500 million sequentially as well.
Production shifts, robotics, and AI investment
Musk further confirmed that Model S and Model X production is expected to wind down next quarter, and plans are underway to convert Fremont’s S/X line into an Optimus robot factory with a capacity of one million units.
Tesla’s Robotaxi fleet has surpassed 500 vehicles, operating across the Bay Area and Austin, with Musk noting a rapid monthly expansion pace. He also reiterated that CyberCab production is expected to begin in April, following a slow initial S-curve ramp before scaling beyond other vehicle programs.
Looking ahead, Tesla expects its capital expenditures to exceed $20 billion next year, thanks to the company’s operations across its six factories, the expansion of its fleet expansion, and the ramp of its AI compute. Additional investments in AI chips, compute infrastructure, and future in-house semiconductor manufacturing were discussed but are not included in the company’s current CapEx guidance.
More importantly, Tesla ended the year with a larger backlog than in recent years. This is supported by record deliveries in smaller international markets and stronger demand across APAC and EMEA. Energy backlog remains strong globally as well, though Tesla cautioned that margin pressure could emerge from competition, policy uncertainty, and tariffs.
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