Tesla Inc (NASDAQ:TSLA) will report its fourth quarter 2025 earnings on Wednesday after markets close, and Wedbush analysts say investors will be closely watching the company’s progress on autonomous driving and robotics as demand appears to be stabilizing.
Wedbush reiterated its ‘Outperform’ rating on Tesla and set a 12-month price target of $600, citing improving delivery trends and the company’s “AI transformation” driven by autonomous and robotics initiatives.
Shares of Tesla traded hands at $434 on Wednesday afternoon, up more than 9% in the last 12 months.
For Q4, Wedbush’s analysts are forecasting revenue of about $25 billion for the quarter, with automotive revenue near $18 billion. Wedbush believes those targets are “achievable given the strength across EV deliveries in Q4 and energy generation,” which could provide additional upside.
The firm also said it expects gross margin excluding credits to continue improving and noted that earnings per share are expected to be $0.45. EPS could come in higher, writing that the company’s energy division carries a higher margin profile when compared to its EV business, the analysts noted.
Wedbush further predicted that “full self driving (FSD) penetration could increase to 50%+ and change the financial model/margins for Tesla looking ahead.”
The firm noted that Tesla has delivered back-to-back quarters of improving delivery performance, following a strong refresh cycle in its lower-cost vehicles in September 2025 and new vehicle launches across regions, including the Model YL in China.
These factors “lead to incremental opportunities to deliver better top-line results this upcoming quarter,” the analysts wrote.
However, Wedbush said the narrative for Tesla is increasingly centered on its autonomous ambitions rather than purely vehicle sales. The biggest focus for investors, according to the analysts, will be updates on Tesla’s Robotaxi rollout across the United States and the potential removal of safety drivers from its fleet.
“The Street is at a crossroads with Tesla as the bulls and bears debate how quickly the Robotaxi era will take shape over the coming year,” the analysts wrote.
The analysts also highlighted that Tesla recently removed safety drivers from its Austin fleet, calling it “an important first step in its long-term vision for the Robotaxi.”
They an accelerated rollout across the US with “volume production of Cybercabs starting in the April/May timeframe,” and noted that CEO Elon Musk is expected to address both Cybercab and Optimus on the earnings call.
Wedbush also pointed to potential regulatory developments in 2026, writing that they expect “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 likely under an Executive Order.”
Wedbush framed the coming year as a turning point for Tesla, saying Musk is “now driving Tesla into its next stage of growth as ‘wartime CEO’” and projecting that Robotaxis could be rolled out aggressively to more than 30 US cities in 2026.
“We continue to strongly believe the most important chapter in Tesla's growth story is now beginning with the AI era now here,” the analysts wrote. “It starts with autonomous then robotics as we believe the autonomous valuation is worth $1 trillion alone to the Tesla story over the next few years that will start to get unlocked over the coming months.
The analysts believe Tesla could reach a $2 trillion market cap over the coming year and, in a bull case, $3 trillion by the end of 2026. The firm also predicted that Tesla could own approximately 70% of the global autonomous market over the next decade, arguing that “no other company can match the scale and scope of Tesla coupled with its broadening AI footprint.”
- Updated with share price movement -