Tesla Inc (NASDAQ:TSLA) is poised to enter a “golden age of autonomous growth,” according to Wedbush’s Dan Ives, who raised his price target on the electric vehicle maker by more than 40% to $500, citing the upcoming rollout of key AI and full self-driving (FSD) initiatives.
In a note, Ives called Tesla “the most undervalued AI play in the market today” and said the launch of new autonomous capabilities in Austin, Texas, set for June, will mark the start of a “massive stage of valuation creation” for the Elon Musk-led company.
“The AI Revolution is now coming to Tesla,” Ives wrote, adding that the company’s focus on full self-driving and robotics will place it in the same conversation as Nvidia Corp (NASDAQ:NVDA, ETR:NVD), Microsoft Corp (NASDAQ:MSFT), and OpenAI in terms of long-term tech disruption.
“We believe the vast majority of valuation upside looking ahead for Tesla is centered around the success of its autonomous vision.”
Ives believes the AI and autonomy opportunity alone could be worth at least $1 trillion to Tesla, with a potential market capitalization of $2 trillion by the end of 2026 in a bull-case scenario.
While acknowledging that 2025 began on a “dark” note for Tesla due to political distractions surrounding Musk’s ties to Donald Trump, Ives said those issues are now “in the rear-view mirror” and investors are refocusing on Tesla’s AI roadmap.
“We are now seeing a recommitted Musk leading Tesla as CEO into this autonomous and robotics future,” Ives said, predicting the company will benefit from reduced regulatory resistance under a possible Trump administration, which could accelerate federal approvals for FSD features.
Ives projected that FSD adoption could exceed 50% among Tesla owners, dramatically improving margins and reshaping the company’s financial model. He also highlighted the upcoming Cybercab platform — Tesla’s robotaxi initiative — as a “golden goose” that could transform the company’s revenue streams.
Despite challenges in China and Europe, where Tesla’s Model Y has seen slowing momentum, Ives said the broader investor focus is now shifting toward Tesla’s AI-driven future. He added that in time, Tesla could license its self-driving technology to other automakers globally.
“There will be many setbacks,” Ives wrote. “But given its unmatched scale and scope globally, we believe Tesla has the opportunity to own the autonomous market.”