Tesla Inc (NASDAQ:TSLA) stock fell 0.26% (As on September 23, 11:14:06 AM UTC-4, Source: Google Finance) after Baird upgraded the company to Outperform from Neutral with a price target of $548, up from $320. While the company’s car volumes will likely decline again in 2025 and near-term fundamentals “will be choppy,” the shares will outperform as Tesla is increasingly viewed as the leader in physical artificial intelligence, the firm tells investors in a research note
The upgrade comes despite Tesla missing estimates for three consecutive quarters, with Baird noting that investor focus has “increasingly shifted to the future” for the electric vehicle maker. Baird expects Tesla’s sales volumes to “likely decline again in full-year 2025” and anticipates “near-term fundamentals will be choppy,” yet still believes the stock will outperform the market.
Further, the firm cited Tesla’s position as “the leader in physical AI” as a key factor in its more bullish outlook, alongside the implications of the company’s recently proposed executive pay package. Tesla stock has gained 10% year-to-date compared to the S&P 500’s 13% rise, and has surged 24% over the past month versus the broader market’s 3% increase.
In other recent news, Tesla has been in the spotlight with several significant developments. Tesla Inc. reached a confidential settlement with the family of a teenager involved in a 2019 crash with a Model 3 using Autopilot, allowing the company to avoid a jury trial. Meanwhile, Goldman Sachs has raised its price target for Tesla to $395, citing higher market multiples and increased forward earnings estimates, while maintaining a Neutral rating. Additionally, Tesla CEO Elon Musk purchased nearly $1 billion worth of company shares, which analysts from William Blair interpreted as a strong signal of confidence in Tesla’s future, especially its robotaxi initiative. third-quarter deliveries could outpace Wall Street expectations, according to UBS. Analysts at the bank said in a note to clients that they have lifted their forecast to about 475,000 units, which is “~8% above Visible Alpha consensus,” though they added it is “more inline with buyside expectations in the 470–475k range.” UBS raised its estimate from 431,000, noting that such a result would be up 3% year on year and 24% sequentially.
Meanwhile, after a small-scale test in Austin, Texas, Tesla would rapidly expand driverless cabs to markets including the San Francisco Bay Area, where it was “getting the regulatory permission to launch.” Musk posted on X earlier that month that Tesla would deploy robotaxis there “probably in a month or two.” The reality of Tesla’s San Francisco plans did not include driverless taxis at all.
Morgan Stanley has also drawn parallels between the TikTok situation and Tesla’s role in the embodied AI sector, suggesting potential synergies between U.S. technology and Chinese manufacturing capabilities. These developments reflect the broader market’s interest in Tesla’s long-term growth potential and strategic moves.