1 Wall Street analyst thinks Tesla stock will go to $515. Is it a purchase?

On By Littum

Probably recently changed to Tesla (NASDAQ: TSLA) that a prominent Wall Street analyst just raised his price target on the stock by $115. Wedbush analyst Dan Ives now believes that Tesla stock can trade for $515 per share. That’s a new high among Wall Street analysts, and it represents only Ives’ base case.

In his most bullish scenario, Ives sees Tesla shares worth as much as $650, according to Barron’s. Tesla shares are up 84% since the US election, but Ives believes there is still more than 10% upside to where the stock is trading at the time of writing, even in his base case.

The sharp rise in Tesla stock hasn’t come from major changes at the company. Instead, investors seem to believe that the landscape has improved significantly for the company self-driving technology and its plans for a fleet of robot axes. That trust stems from CEO Elon Musk’s role as a close advisor to the newly elected President Donald Trump.

In his report, Ives wrote that the incoming Trump administration is a “total game changer for the autonomous story and AI (artificial intelligence) story for Tesla and Musk in the coming years.” He believes policies from the new administration will help Tesla roll out its full self-driving (FSD) technology for a driverless fleet of robot axes, as well as with Tesla driver subscriptions. The question for investors, however, is just how much that opportunity will be worth to the company.

Some, like Ives, believe that’s enough to push Tesla to a $2 trillion valuation within the next 12 to 18 months. However, investors buying the stock now should go in with their eyes open. Any more delays or stumbles in Tesla’s quest to make driverless cars mainstream will undoubtedly hit the stock price.

For those who can focus on the years and decades ahead, Tesla may still be worth owning. Along with self-driving cars, the future of Tesla may also include growing sales of energy storage and humanoid robotics that can help businesses become more efficient. Ives seems to be trying to get ahead of the crowd with his estimates.

When our team of analysts has a stock tip, it pays to listen. After all, Equity advisor the total average return is 919% — a market-crushing outperformance compared to 178% for the S&P 500.*

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