Tesla (NASDAQ:TSLA | TSLA Price Prediction) can be a pretty difficult Mag Seven stock to value, given all that hinges on robotaxis. It’s not just a matter of Tesla’s robotaxi (the Cybercab) going right, but the timeline of a rollout. Even with self-driving vehicles roaming the streets of select cities, it’s tough to tell when that nationwide expansion will get that long-awaited green light as robotaxis graduate from operating solely within select cities (like Los Angeles and Austin).
Undoubtedly, the Trump administration, which is embracing deregulation and next-generation technologies (AI) with open arms, bodes well for a more rapid Cybercab rollout. In any case, with so much uncertainty hovering over how the electric vehicle (EV) maker’s nearer-term future will look (sales could really take a hit from a potential economic contraction), it should come as no surprise to witness how wide of a gap there is between Wall Street’s biggest bull and bear.
Tesla stock: A multi-bagger in the making? Or at risk of a catastrophic implosion?
If you subscribe to analyst projections, you may have realized just how varied the price targets are on Tesla at the high and low ends. They do seem to be all over the place, primarily due to the criteria analysts choose to value the company (how much should AI factor in? What about a cyclical decline in the autos in the face of a recession?).
Indeed, Tesla is very much a higher-risk, higher-reward type of play that will be too volatile for the stomachs of many. That said, the big question for investors is whether it’s the bears or the bulls that will win the tug-of-war. During the Liberation Day meltdown, it seemed like Tesla stock was on its way to $120 or even the double-digits. Fast forward to today, and it’s off to the races for Tesla again as investors ready for the Cybercab launch as it looks to catch up with the likes of its Mag Seven peer who’s made good progress with its service since storming out of the gate.
We’ll have to wait and see how the Cybercab fares.
It’s hard to believe, but Alphabet (NASDAQ:GOOG), through its robotaxi service, Waymo, has already given 10 million rides as of this week. This major milestone comes at a time when the firm is giving a quarter of a million worth of paid rides per month. Time will tell how riders will rate Tesla’s offering when its big day arrives. Either way, the robotaxi race will be on for the summer, and the excitement alone could cause some investors to flood back into TSLA shares.
At the time of this writing, Colin Langan of Wells Fargo (NYSE:WFC), one of the more bearish analysts covering Tesla, has a $120 price target on the stock, which implies close to 66% downside from current levels. Langan isn’t even the biggest bear on the Street. That title goes to Gordon Johnson of GLJ Research, who sports a $19.05 price target on Tesla, implying even more devastating downside.
On the upside, the Wall Street-high target of $450 per share goes to Stephen Gengaro of Stifel Nicolaus. Still, Tesla’s biggest bull likely lies outside the analyst community. Arguably, that title should go to Ark Invest’s Cathie Wood, who maintains a five-year price target of $2,600 per share.
Undoubtedly, that’s an obscenely high price target that no investor should expect to be hit anytime soon. As to whether it’s realistic in the next five years, though, depends on how smoothly Tesla’s move into the robotaxi scene will be. Indeed, there are sure to be the odd setbacks as an increasing number of robotaxis hit the roads. But in five years’ time, I do think a bull case scenario may be as explosive as Wood believes.
The bottom line
At the end of the day, Tesla is both a car company and a tech firm. With Elon Musk intending to continue buying more GPUs to secure his companies’ AI-driven future, the argument for valuing Tesla as an explosive-growth AI company seems to be getting stronger as the EV juggernaut begins its self-driving journey from Austin, Texas, in June. With Musk reaffirming his commitment to stay aboard the Tesla ship, I wouldn’t be in a hurry to bet against the stock right here, especially given the chance that its Cybercab impresses and manages to outshine Waymo.
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