Wedbush has sharply raised its price target on Tesla Inc (NASDAQ:TSLA) from $350 to $500, citing what it describes as the beginning of a “golden age of autonomous growth” for the electric vehicle maker.
The bank sees the forthcoming launch of full self-driving capabilities in Austin as the catalyst for a significant revaluation of Tesla’s business model and long-term prospects.
Analyst Dan Ives maintains an outperform rating on the stock and estimates that Tesla’s opportunity in artificial intelligence and autonomous vehicles alone could be worth $1 trillion.
In a bullish scenario, the company could reach a $2 trillion market capitalisation within 18 months, driven by rising take-up of its full self-driving software and the commercial rollout of its Cybercab autonomous ride-hailing service.
Rocky start
The upgrade comes after a rocky start to 2025 for Tesla, which saw investor concerns swirl around Elon Musk’s political involvement and the brand impact of his association with the Trump administration.
Wedbush believes that chapter is now closed and that Musk is re-engaged in his role as chief executive, focusing fully on the company’s next wave of innovation.
While the group still faces challenges in growing Model Y sales in China and Europe, the key narrative, according to Wedbush, is Tesla’s transformation into a global artificial intelligence platform.
The firm ranks Tesla alongside Microsoft, Nvidia and Amazon as one of the best long-term plays on the growth of autonomous and AI-driven technologies.
Full self-drive
Much of the valuation upside is tied to the scaling of Tesla’s full self-driving software, or FSD. Wedbush believes FSD could reach penetration of more than 50% across Tesla’s installed vehicle base.
That shift could significantly alter the group’s margin profile, with higher software sales complementing its capital-intensive manufacturing model.
Importantly, the June launch of fully autonomous services in Texas is viewed as more than a technical milestone.
It signals a shift in regulatory support, particularly under the current US administration, which Wedbush expects will help clear the legislative path for broader autonomous deployment. This easing of federal restrictions could accelerate commercialisation across the United States.
Wedbush also believes Tesla will not just build autonomous vehicles for its own fleet but may ultimately license its technology to other manufacturers, creating an additional revenue stream and reinforcing its status as a global platform company.
Execution risk - and reward
The report makes clear that execution risk remains high. Meeting production targets, especially at Gigafactories in Fremont and Shanghai, remains critical. Any shortfall there would undermine both growth forecasts and margins. Regulatory setbacks, especially in China, also remain a concern.
Still, Ives argues that Tesla is fundamentally mispriced given its position at the intersection of AI, robotics and mobility.
The stock’s recent performance reflects uncertainty, but Wedbush believes investors are beginning to look beyond near-term volatility and reassess the longer-term strategic vision.
Tesla, in this view, is no longer just a car company. It is a technology leader in the early stages of monetising the world’s most advanced autonomous platform. Rome was not built in a day, as Wedbush puts it, and neither will Tesla’s AI ambitions—but the groundwork has now been laid.