Tesla is worth about $1.5 trillion now, and its valuation could double by the end of next year, according to one of the biggest bulls on Wall Street.
Wedbush analyst Daniel Ives predicts “a monster year ahead for Tesla and Musk as the autonomous and robotics chapter begins,” he wrote in a note to clients Monday.
While Ives’s $600 target price translates to a $2 trillion valuation for Tesla, he sees a more upbeat scenario where the company could reach a $3 trillion valuation within a year. That growth would mostly come as a result of Tesla’s work on artificial intelligence and self-driving vehicles, which Ives said is worth “at least” $1 trillion.
His optimism helped to drive Tesla shares about 3.6% higher on Monday. Shares traded up as much as 4.9% earlier in the session, which would have been enough for their first record close since Dec. 17, 2024, according to Dow Jones Market Data. But they closed at $475.31, just shy of the $479.86 level needed to clinch a fresh record close.
For months, Tesla has been operating a ride-hailing service in Austin, Texas, and the San Francisco Bay Area, with the goal of eventually filling out its platform with robotaxis. It currently relies on Tesla vehicles equipped with the company’s advanced driver-assistance system and overseen by an employee capable of interfering in emergency situations.
But over the weekend, CEO Elon Musk said Tesla has started testing aimed at allowing its vehicles in Austin to operate fully autonomously, without that worker. He has previously said that Tesla aims to remove its employees from the cars by the end of the year.
“Unsupervised is pretty much solved at this point,” Musk said at a recent event hosted by his xAI startup, which Tesla may invest in. “So there will be Tesla robotaxis operating in Austin with no one in them.”
Tesla also aims to increase the size of its fleet and expand operations to several additional cities in Florida, Nevada, Arizona and Texas by the end of the month. But that process can be lengthy, partly because states and municipalities often have different requirements that companies need to meet.
That burden could be lessened in early 2026, Ives said, positing that the White House could shift that regulatory power away from the states. That would “likely” occur, he said, through an executive order from President Donald Trump, who last week signed an order targeted at blocking states from making their own regulations regarding AI.
“Trump wants the U.S. to stay ahead of China in this AI arms race and autonomous is a key factor in who wins AI,” Ives said, adding that Tesla will play a “major role” with robotaxis.
He also expects Tesla to begin receiving a major boost from selling its Full Self-Driving advanced driver-assistance system, with more than half of its customers paying either a one-time fee or a monthly subscription for the software. That would be a dramatic change of pace, since just 12% of customers have opted to buy the software as of last quarter, according to executives.
There is a chance that more customers will purchase FSD next year if Tesla’s robotaxi plans show promise and as software improvements are rolled out. The company is also pushing for regulatory approval in Europe and China next year, which could boost sales of both FSD and electric vehicles. But it’s unclear if Ives’s forecast is achievable.
Tesla will also likely benefit from its work on the Cybercab, a designated robotaxi, and on the Optimus humanoid robot. Both are expected to enter production in 2026 and are central to Tesla’s future.
Combined, Tesla’s AI and robotics plans could move Musk closer to benefiting from his compensation package, which awards him stock based on Tesla’s achievements over the next decade. Outlined goals include the company reaching an $8.5 trillion valuation and selling 1 million robots.