Tesla Inc (NASDAQ:TSLA) investors should be "relieved" that the company wants to pay CEO Elon Musk ... [dramatic pause to make a Dr Evil Face] ... one trillion dollars.
This is the view of Daniel Ives, analyst at West Coast stockbroker Wedbush, which today repeated an 'Outperform' rating for the electric vehicle pioneer's shares, with a 12-month price target of $500 that suggests some 25% upside to the current market price.
In the wake of the trillion-dollar proposal, it has today emerged that Musk last week bought in the market some $1 billion worth of additional shares in the company.
Also over the weekend, the new Pope namechecked Musk during his first interview whilst criticising executive pay and the widening gap between the rich and the poor.
Nevertheless, Wedbush reckons Telsa shareholders will be onboard with giving Musk the largest ever pay deal (largelty via incentivised stock options).
"We believe that Musk's new pay package was a relief for investors as this will confirm Musk stays CEO of Tesla at least until 2030 in our view, as Musk remains the most important asset to Tesla and the Board made the smart and right move," Ives said in a note.
Early impressions in the market appear to back up the claim, with Tesla stock jumping close to 7% on the news of Musk's recent share buying.
In Monday's opening trade in New York, Tesla gained $26.68 to $422.62.
Ives, in his note, likens Musk to a "wartime" CEO and reckons his leadership will be key to Tesla seizing a dominant position in new AI-led 'robotaxi' markets in the coming years.
"We believe Tesla and Musk are heading into a very important chapter of their growth story as the AI Revolution takes hold and the Robotaxi opportunity is now a reality on the doorstep," the analyst asserted.
"Investors are starting to see through the near-term demand issues for Tesla and recognize that Tesla is in a pole position to be a clear leader in the autonomous market opportunity with Robotaxis set to scale to 30 to 35 cities in the US over the next year."
Ives added: "We expect over the coming months an easing of the federal framework for autonomous with more power going to the federal regulators with states having less authority on the autonomous rules framework."
Moreover, the Wedbush analyst said he believes Tesla may see its market value reach some $2 trillion by the middle of 2026, in the broker's bull-case scenario.
"The march to a $2 trillion valuation for TSLA over the next 12 to 18 months has now begun in our view, with full self-driving (FSD) and autonomous penetration of Tesla's installed base, and the acceleration of Cybercab in the US representing the golden goose for Musk & Co."