On Sunday, Wedbush analyst Dan Ives raised his price target on Tesla to $515 from $400, making it the highest price target on Wall Street. He also gave a target price of $650 under the "optimistic scenario", which would bring Tesla's market value to about $2.1 trillion, while the current new target price corresponds to a market value of about $1.7 trillion.
Ives said in the report that the Trump administration will be a "game-changer for Tesla and Musk in autonomous driving and AI in the coming years."
Tesla uses artificial intelligence-based computing technology to train cars to drive themselves, and its highest level of driver assistance software-Full Self Driving (FSD) feature continues to improve. The software is currently able to complete driving tasks most of the time, but it still requires human supervision. At the same time,GoogleWaymo, an autonomous driving company owned by parent company Alphabet (GOOGL.US, GOOG.US), completes more than 150,000 driverless taxi services per week and plans to expand Waymo services to more cities in 2025.
As technology matures, Ives and many Wall Street analysts expect Trump policies to make it easier to provide autonomous driving services. "We believe that Tesla's progress towards a $2 trillion market capitalization in the next 12 to 18 months has already begun," he wrote in a Sunday note.
Ives has been a longtime Tesla bull with a "buy" rating on the stock. However, the significance of this increase in the target price is to solve an unusual phenomenon-the recent increase in Tesla's stock price has exceeded the highest target price of mainstream Wall Street brokerages.
Before Monday's trading, Tesla's stock price had risen 73% since the U.S. election on November 5, with an increase of 76% during the year. This wave of gains is so rapid that its stock price even exceeded the highest price target of $420 previously set by Daiwa analyst Jairam Nathan.
This kind of share price surpassing the highest price target on Wall Street is very rare. Historical data shows that the last time Tesla's stock price exceeded $400 was at the end of 2021, when only a few analysts in the market had a target price higher than $467.
Now, investors finally have a price target well above last Friday's closing price of $436.23, which may give them some confidence. However, it still needs time to test whether this epic rise in Tesla's stock price can continue in the future.
As of the end of trading on Monday, Tesla stock has risen about 86% for the year, just 11% short of Ives' new price target of $515.
