Purchase Shares of This Artificial Intelligence Company at an Accelerated Rate. Analyst Dan Ives Predicts a 52% Surge.
Over the past few months, Tesla (TSLA -4.68%) shares have been on a wild rollercoaster ride. Following President Trump's triumphant election victory on November 5, Tesla stocks skyrocketed an impressive 91%. Tesla CEO Elon Musk's close ties with the president have primarily been viewed as an advantage, especially when it comes to potential friendlier regulations for Tesla's autonomous driving ambitions.
However, the new year brought a change of pace for Tesla shares, with the stock giving back some of its election-driven gains. So far in 2025, the stock has seen a decline of approximately 10%.
Let's delve into some of the factors influencing Tesla's recent stock performance and examine why now could be an excellent opportunity to capitalize on the dip.
What's moving Tesla's shares?
A concoction of factors has recently weighed on Tesla's shares. For starters, the company's fourth-quarter and full-year 2024 financial results painted a less-than-ideal picture. While the energy storage and services sector performed amazingly, the core electric vehicle (EV) operation struggled. EV sales for the year decreased by 6%, leading some investors to question both the health of the economy and Tesla's standing alongside domestic and foreign competition, particularly in China.
In addition, Trump has implemented tariffs as he had promised during his campaign. He has also threatened additional tariffs on imports, with China being a significant market for Tesla. The uncertainty surrounding the tariff impact on trade is causing concern, and the potential for Tesla's operations to be negatively affected is a valid concern.
Lastly, Musk has been spending a significant amount of time in Washington, leading the Trump administration's "Department of Government Efficiency" initiative. Some investors worry that his credence in this role might draw his focus away from Tesla, potentially weakening the company's operations.
While these factors may have validity, it's essential to consider other aspects as well.
Keeping the long-term vision in focus
Despite the disappointing earnings report, Musk kept investors excited about Tesla's future in the call by discussing artificial intelligence (AI) and its role in harnessing self-driving car software and building a fleet of humanoid robots named Optimus. These areas have garnered significant interest from Wall Street well.
Dan Ives, technology research leader at Wedbush Securities, publicly showcased his bullish stance on Tesla in a Feb. 12 research note. Despite acknowledging the risks mentioned above, Ives believes that the deregulated environment under the Trump administration can unlock an incredible $1 trillion of value for Tesla's autonomous driving project. Consequently, he predicts a 12-month price target of $550 for Tesla, insinuating a potential 52% increase from its current market value.
I venture to agree with Ives' optimism for Tesla's future. In my assessment, Musk's time in Washington does not deteriorate existing projects at Tesla. For instance, Tesla plans to roll out unsupervised full self-driving (FSD) services in Austin by June, and they are highly unlikely to alter this timeline unless there is an unforeseen issue with the product.
To me, the long-term vision for Tesla - specifically, its AI-driven focus - remains intact. The only shift is the perception surrounding Tesla given the latest Musk-inspired Washington project.
Future-focused investors may still find Tesla to be an alluring opportunity to buy and hold during this turbulent stock swings.
- Despite the recent decline in Tesla's stock price, some financial analysts, like Dan Ives from Wedbush Securities, remain optimistic about the company's future gains, particularly in its autonomous driving project, which they believe could unlock a significant value of $1 trillion under the deregulated environment.
- The pessimism surrounding Tesla's stock performance can be partially attributed to the company's Fourth-quarter and full-year 2024 financial results, which showed a decrease in EV sales by 6%, leading some investors to question Tesla's standing in the competitive electric vehicle market, especially in China, where Trump's tariffs pose a potential threat.
- Investing in Tesla's stock during this period of turbulence could be an excellent opportunity for those who share Elon Musk's long-term vision for the company, which includes the development of artificial intelligence-driven self-driving car software and humanoid robots named Optimus.
- Money managers who are interested in finance and investing in topical companies like Tesla should heavily consider the company's ambitions in AI and autonomous driving, along with potential external factors like tariffs and regulatory changes, when evaluating their investment strategies in this sector.
