Investor's Corner
Tesla (TSLA) could be in striking distance of a short squeeze soon: Piper Jaffray
Back in the second quarter, Elon Musk predicted that the “short burn of the century” was coming soon. During that time, Tesla was racing to hit a Model 3 production rate of 5,000 units per week. The electric car maker did reach its Q2 production goals for the Model 3 then, though Elon Musk’s prediction did not come to pass.
If a recent statement from Wall Street is any indication, Tesla might actually be closing in on what could be a very notable and very realistic short squeeze.
In an appearance at CNBC’s Trading Nation, Craig Johnson, chief market technician at Piper Jaffray, stated that Tesla’s outperformance has made life quite difficult for the company’s short-sellers. This has been particularly notable recently, as Tesla shares (NASDAQ:TSLA) soared higher even as the market mostly spiraled down. In the past three months alone, TSLA has gone up 37%, while the Nasdaq plunged 8%.
Such strength, according to Johnson, has been making short-sellers quite nervous. During his recent CNBC appearance, the Piper Jaffray chief market technician stated that Tesla’s short interest ratio has been falling since around April, when it peaked at 31% of the company’s float. Johnson noted that if Tesla breaks through a key level of resistance, the company could realistically be within striking distance of a massive short covering.
“If we get a close above this $390 level, it’s going to suggest a topside breakout with a measured price objective based on the charts perhaps about $525 to $550. The shorts are going to be covering quickly and providing even a further squeeze higher from here,” the chief market technician said.
-->For such a squeeze to happen, though, Tesla would have to break the high of $389.61 it achieved in September 2017. A move to $525 represents a 46% upside from TSLA stock’s current price of around $360 per share as well.
Tesla is positioned pretty well this fourth quarter to deliver a big blow to short-sellers. The company’s fundamentals, after all, have been showing signs of strength since the end of the third quarter, when Tesla surprised Wall Street by posting $6.8 billion in revenue. This fourth quarter, Tesla seems poised to produce and deliver another record number of electric cars, thanks to the introduction of the Mid Range Model 3 last October. The phase-out period of the $7,500 federal tax credit in the United States is also expected to push the company’s numbers for Q4 even further.
Tesla’s Fremont factory and Gigafactory 1 in Nevada seem to be operating optimally as well. Elon Musk has noted that Tesla is now at a point where producing 5,000 Model 3 per week is no big deal, and the pieces are being put in place for a ramp towards even higher production numbers. The Model 3’s most disruptive variant, the $35,000 Standard Range RWD version, is getting closer to production. Overseas, progress for the construction of Gigafactory 3 in Shanghai is also moving at an extremely rapid pace.
Tesla had the cards stacked against it for the most part of the year, but the company has powered through. With possibly even better fundamentals this fourth quarter, Elon Musk’s predicted “short burn of the century” might finally be coming — and just as it is with many things Tesla, it could just be happening in Elon Time.
As of writing, Tesla stock is trading +0.77% at $360.73.
-->Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
-->“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
-->Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
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