MW Tesla has a rosy AI future to this analyst, but tariff worries are weighing on the stock

By James Rogers

Tesla's 'dark chapter' is in the rearview mirror, Wedbush analyst Dan Ives says

The last few months have been turbulent for Tesla Inc., marked by the backlash against Chief Executive Elon Musk's central role in the so-called Department of Government Efficiency, intensifying competition for EVs, and declining sales in key markets such as Germany and China.

But Wedbush analyst and long-standing Tesla $(TSLA)$ bull Dan Ives now sees a "golden age of autonomous growth" ahead for the EV maker. The analyst raised his price target on Tesla's stock to $500 from $350, implying a rally of nearly 50% over Friday's share price.

Wedbush analyst Dan Ives estimates that AI and autonomous driving represent an opportunity that alone is worth at least $1 trillion to Tesla.

Investors are seeing "a recommitted Musk leading Tesla as CEO into this autonomous and robotics future ahead with his days in the White House now essentially over," Ives said in a note Friday.

Ives's optimistic view of Tesla's future, however, was facing a less hospitable reality marked by trade-war fears.

Tesla shares gained in premarket trading but turned lower in midday trading as President Donald Trump, in a post on Truth Social earlier Friday, threatened a 50% tariff on the European Union starting June 1.

In a pair of interviews this week, Musk said that he is committed to remaining Tesla's chief executive for the next five years. Musk also said he expects "to do a lot less" political spending in the future, indicated he's spending less time in Washington, D.C., and confirmed Tesla's short-term plans for autonomous vehicles.

See: Here's why Tesla investors care so much that Elon Musk stops his Trump-leaning political donations

Ives, who had cut his price target for the company's stock earlier this year, kept the equivalent of a buy rating on Tesla shares.

"While there is still some wood to chop to turn around Model Y growth in China and Europe, we believe the core focus for investors is the AI Revolution is now coming to Tesla," he wrote.

This will make Tesla one of the best "AI pure plays" over the next decade along with Nvidia Corp. $(NVDA)$, Microsoft Corp. $(MSFT)$, OpenAi, Palantir Technologies Inc. (PLTR), Amazon.com Inc. $(AMZN)$, Meta Platforms Inc. $(META)$ and Alphabet Inc. $(GOOG)$ $(GOOGL)$, Ives said.

"We believe the vast majority of valuation upside looking ahead for Tesla is centered around the success of its autonomous vision taking hold with a key June launch in Austin the beginning of this next era of growth for Musk and Tesla," Ives said.

The analyst estimated that the AI and autonomous driving opportunity is worth at least $1 trillion alone for Tesla. Moreover, these key initiatives "will now get fast tracked" and cleared under Trump.

Tesla's stock is down about 16% this year, underperforming the S&P 500 index SPX, which is down about 1.5%.

-James Rogers

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May 23, 2025 13:07 ET (17:07 GMT)

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