Tesla Inc. (NASDAQ:TSLA) has faced significant volatility in recent months, but a new bullish outlook is sparking optimism among investors. Despite declining vehicle deliveries and increased competition, TD Cowen has upgraded Tesla’s stock, predicting a potential Tesla stock rally of 60% from current levels. Could this be the turning point for TSLA?
TD Cowen Sees a Major Tesla Stock Rally
Following a sharp 40% year-to-date decline, Tesla stock has struggled due to concerns over tariffs, slowing demand, and CEO Elon Musk’s various business distractions. However, TD Cowen analyst Itay Michaeli believes Tesla stock rally is on the horizon, upgrading TSLA from “Hold” to “Buy” and increasing his price target from $180 to $388.
Michaeli argues that Tesla’s unique position in the autonomous vehicle market, combined with its expansion into AI-driven mobility solutions, sets it apart from traditional automakers. “Tesla is best positioned to capture sizable opportunities across auto/mobility and adjacent markets,” he stated.
Tesla’s Growth Continues Despite Challenges
While Tesla’s Q4 earnings report fell slightly short of analyst expectations, the company still demonstrated growth.
Revenue: Up 2% year-over-year to $25.71 billion
Earnings Per Share: $0.73 (below the forecasted $0.75)
Charging Stations: Increased 17% to 6,975
Charging Connectors: Expanded 19% to 65,495
Operating Cash Flow: Grew to $4.8 billion from $4.4 billion in the prior year
Cash Reserves: $36.6 billion, far exceeding short-term debt of $14.9 billion
Although Tesla’s vehicle sales have slowed, the company’s ability to maintain strong financial health could support future innovation and expansion.
What’s Fueling the Tesla Stock Rally?
Several strategic initiatives could drive Tesla’s future growth:
- The Dojo Supercomputer
Tesla’s Dojo supercomputer is expected to significantly enhance Full Self-Driving (FSD) capabilities by processing vast amounts of real-world driving data. Analysts at Morgan Stanley estimate Dojo could add up to $500 billion in enterprise value, reinforcing Tesla’s AI leadership.
- Optimus Humanoid Robots
Tesla plans to deploy thousands of Optimus robots this year, initially improving internal operations. Musk has projected a $10 trillion long-term revenue opportunity for the humanoid robotics sector. If successful, Optimus could revolutionize automation across industries.
- Energy Storage Expansion
Tesla’s energy division is growing rapidly, with its Megapack and Powerwall businesses expected to expand by 50% in 2025. The Shanghai Megafactory will play a critical role in supporting the global shift to renewable energy.
- Autonomous Ride-Hailing Service
Tesla has applied for a transportation charter permit in California, aiming to launch a driverless ride-hailing service. Musk has hinted at an Austin-based rollout this year, with California expansion to follow.
- Affordable Tesla Model in 2025
To counter declining demand, Tesla plans to introduce a lower-cost model in early 2025, making its vehicles more accessible to a broader customer base.
Analyst Sentiment on Tesla Stock
Despite TD Cowen’s bullish upgrade, the broader analyst consensus on Tesla remains mixed:
14 analysts rate TSLA as a “Strong Buy”
3 analysts label it a “Moderate Buy”
13 analysts suggest “Hold”
10 analysts call it a “Strong Sell”
The average price target for Tesla stock stands at $348.03, representing a 45% upside from current levels.
Bottom Line: Is Now the Time to Buy Tesla Stock?
Tesla’s recent struggles have tested investor confidence, but the company’s long-term growth story remains compelling. With AI advancements, energy expansion, and autonomous vehicle ambitions, Tesla is positioning itself for future success. If TD Cowen’s Tesla stock rally prediction holds true, TSLA could offer significant upside for patient investors.
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