Tesla: Stifel hikes target, reiterates Buy on AI, self-driving prospects

Investing.com– Stifel hiked its target price for Tesla Inc (NASDAQ:) and reiterated its Buy rating on the electric vehicle maker citing increased confidence in its artificial intelligence and autonomous driving offerings.

Stifel hiked Tesla’s target price to $411.0 from $287.0- representing a 19% upside from Tesla’s close on Friday. 

The brokerage reiterated its Buy rating on the stock, stating that holding Tesla required willingness to accept volatility. 

Stifel cited increased confidence in Tesla beyond its automaking business, specifically the firm’s plans for AI and self-driving offerings. 

“While we have confidence in TSLA’s Auto business, the significant value creation potential from its AI-based full self-driving capabilities and Cybercab (Robotaxi) underpin our positive outlook,” Stifel said. 

The brokerage said CEO Elon Musk’s involvement in the Donald Trump administration could “accelerate regulatory approvals” for self-driving, which bodes well for the company. Tesla’s stock rallied nearly 40% in November after Trump’s victory in the 2024 presidential election. 

Tesla had in October unveiled its Robotaxi to limited fanfare, especially amid questions over how the EV maker will clear regulatory hurdles to launch the offering. 

Stifel cited Tesla’s dominance in EV markets, its capabilities for self-driving, as well as Tesla’s elaborate charging network as bull cases for the stock.

For a bear case, Stifel cited concerns over a stretched valuation for Tesla’s stock, which is trading at 55.7 times projected earnings for 2025. 

China also represents potential headwinds for Tesla, given that the EV maker is struggling with intense competition from local players.