Tesla Inc. (NASDAQ: TSLA) stock seems like a prime stock to buy on weakness as other investors run scared, with the name now down more than 40% from its recent peak. Elon Musk’s EV empire now outside of the $1 trillion club, with the latest tumble bringing it to a market cap of around $900 billion. So, questions linger as to whether the most ambitious of growth drivers (think Cybercab and Optimus humanoid robot, both of which were featured at the company’s robotaxi event last year) will bear fruit sooner rather than later.

Indeed, Tesla’s stock has gone through vicious crashes before. And while the stock may not be ready to shift gears from reverse to forward, I do think that a worsening of its latest drawdown could prove a significant buying opportunity, given the chance its drivers could pay off at some point over the medium term. Undoubtedly, the bears may be winning the tug-of-war on the stock now, as Elon Musk’s role at DOGE (Department of Government Efficiency) becomes old news as hype surrounding Musk’s friendship with Trump begins to fade. 

In any case, this piece dives into the lengthy list of drivers and potholes that investors should look forward to (or fasten their seatbelts for) in the coming year and beyond. Let’s check out a bull, bear, and base case for the EV titan and have a glimpse at the varied viewpoints of multiple Wall Street pros.

In fact, Tesla stock has a ton of table-pounding bulls in addition to massive bears. While not everyone is the biggest fan of Elon Musk, I do think it’s a mistake to discount his ability to keep running with the ball into the endzone with disruptive innovations that, while costly in the near term, could prove revolutionary over the longer term. 

Despite the Steep Stock Drop, Tesla’s Top Two Growth Drivers Are Still Humming Along

For a stock that’s fallen significantly, I’d expect the growth narrative to have been severely impacted. Tesla’s latest quarterly earnings results were not incredible. Yet, I do think that the sell-off is mostly a mere correction to make up for the euphoric melt-up experienced in the back half of last year. Indeed, investors got too far ahead of themselves when it came to Tesla’s most ambitious growth drivers. Now that investors are taking a step back, we’ll have to wait and see if Tesla can advance such drivers meaningfully.

Undoubtedly, Tesla has a front-row seat to the AI revolution. More specifically, it’s one of the frontrunners in physical AI (or robotics, if you prefer). In a prior piece, I highlighted Wall Street analyst Adam Jonas’ view that TSLA stock was akin to an embodied “AI ETF” given the numerous AI projects going on behind the scenes.

Though Tesla’s AI efforts are exciting, it’s important to note that being too soon to a trend could have a drastic negative impact on the stock. As investors reset expectations and become more critical of how firms spend money on AI, Tesla will need to deliver more substance if it’s to convince investors to punch their ticket to the stock well ahead of time. Personally, I think Tesla’s been investing in the right areas, but will competitors beat Tesla to market in certain categories? 

The most notable drivers, I believe, that will drive Tesla stock in the coming years are the Cybertruck (as well as self-driving capabilities and the impact on the robotaxi market) and its Optimus robot. Of course, there’s also the rumored “Model Q” entry-level offering. But until we get more clarity on that driver, I consider it to be more of a “wild card.”

Bull Case for Tesla’s Share Price

Cybertruck: The Cybertruck stole the show during Tesla’s robotaxi event. While it would be a sci-fi dream for many to have a fairly reasonably priced robotaxi producing passive income for its owners, I do think Musk’s vision of the robotaxi future could be a reality within Trump’s term. Of course, a more realistic timeframe would put such a future more than 10 years out.

However, if Tesla can floor it on FSD (full self-driving) efforts, perhaps such a future could be closer to the present. There’s a great deal of uncertainty here, given the technical and regulatory unknowns. Either way, I view Musk’s friendship with Trump as a boon for a Cybertruck rollout under his administration.

If Cybertruck expands its presence and becomes a hit within years rather than decades, TSLA stock could prove a bargain, given all that there is to gain. The big question, though, is how Cybercab will hold its own as Waymo pushes ahead with its impressive offering. Given robotaxis, like generative AI, are unlikely to be a “winner takes all” market, I think there’s no reason why both robotaxi offerings can’t win big from prime-time adoption of self-driving. 

Another big question to consider is whether consumers will be interested in buying up Cybercabs to have them rolling around on the streets as ride-hailers. I think the business could prove quite lucrative for buyers and Tesla’s margins over the long haul. After all, it can sell the car and continue to build a ride-hailing network while profiting from use of a ride-hailing app of sorts.

Cathie Wood thinks autonomous ride-hailing could represent a multi-trillion-dollar opportunity. If Tesla can get a nice slice, Wood sees TSLA stock at $2,600 per share by 2029. Personally, I think the bull case (for the year ahead) could see TSLA at around $550 per share. That target is shared by Wedbush Securities’ Dan Ives, one of my favorite analysts in tech.

Optimus: Optimus was a nice addition to the robotaxis event as it amused attendees. But the big question is how much potential the robot has once it’s ready to go on sale to the general public.

Undoubtedly, Tesla isn’t the only one getting into the robotics game. Many Mag Seven members also investing heavily in home robots. While more rivals in home robots could be a threat to Optimus, I view it as more of a confirmation that there is a place in the home for such profound innovations.

As for the home robotics market, I do see 2026 as a tad overly optimistic for a launch. However, if robot “friends” do arrive by 2030, I think Tesla’s growth rate could reaccelerate back to or even above 25% to 30% for some amount of time.

Bear Case for Tesla’s Share Price

Cybertruck: Undoubtedly, there’s still a lot of work to do before Cybertruck can take to the roads. FSD capabilities need to step things up and the vehicle needs to be made in a way that won’t break the bank. These are big asks. Some bears have doubts about whether the firm can execute the opportunity.

Ross Gerber, who previously owned shares, has sold out with the view a 50% crash would be in store for 2025. He also thinks FSD “doesn’t work.” If true, that’s a gut punch to Tesla’s biggest growth driver. Either way, there’s not too much room lower with TSLA now off 40%. With Guggenheim labeling TSLA stock as a Sell with a $175 target, I’d brace for even more pain if the market sell-off intensifies.

Optimus: Even if home robots are on the horizon, good luck asking consumers to spend thousands on a proven technology. Indeed, if Vision Pro taught us anything, it’s that being an early adopter is expensive and probably not the best use of funds. Either way, I’d much rather wait and see how the robot ambitions pan out before getting too excited at this stage.

Base Case for Tesla’s Share Price

The base case for Tesla lies somewhere in between the two extremes. Wall Street sees TSLA stock at around the $350 per share range. As to whether target downgrades will happen after the latest dip remains a topic for discussion. Either way, I’m inclined to view the $300 level as a fair-value level for the stock. 

Much of Tesla’s story depends on its big growth drivers. In the meantime, EV sales and the rise of more affordable models (Model Q) could be nearer-term stories to look forward to as one waits for the biggest of drivers to pay off. At the time of writing, TSLA stock goes for 98 times forward price-to-earnings (P/E) and 10.4 times price-to-sales (P/S). That makes the name slightly undervalued, at least in my view.

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