Dan Ives says a $2 trillion Tesla market cap is within reach as robotaxis hit the road and its AI arm gets stronger
In a note Friday morning, analyst Dan Ives raised Tesla’s price target from $350 to $500, saying “the golden age of autonomous is now on the doorstep for Tesla.” The price hike is part of Ives’ larger vision for the company: a possible $2 trillion market cap by the end of 2026 in a “bull case scenario.”
The potential catalyst? The long-promised launch of Tesla’s robotaxi service, which CEO Elon Musk claims will debut in Austin by the end of June — a “key next chapter of growth,” according to Ives. Wedbush’s price hike reflects this “massive stage of valuation creation ahead.”
But Wedbush’s vision of Tesla is less about cars and more about code.
“We have never viewed Tesla simply as a car company,” Ives wrote. “Instead we have always viewed Musk and Tesla as a leading disruptive technology global player and the first part of this grand strategic vision has taken shape over the past 5 years.”
Ives sees Tesla as a platform positioned to capitalize on the convergence of autonomous driving and AI — an “AI revolution” that could eventually put Tesla in the same league as Nvidia $NVDA (NVDA), Microsoft $MSFT (MSFT), Palantir $PLTR (PLTR), Amazon $AMZN (AMZN), Meta $META (META), OpenAI, and Alphabet $GOOGL (GOOGL).
“We believe Tesla remains the most undervalued AI play in the market today,” Ives said. “The core focus for investors is the AI Revolution is now coming to Tesla...which will make Tesla one of the best pure plays on AI over the next decade.”
Ives said AI and autonomous are worth at least $1 trillion for Tesla. And the “golden goose”? The EV-maker’s Full Self-Driving (FSD) software, which has recently been more broadly rolled out. Wedbush said the automaker could see FSD adoption rates rise past 50% “and change the financial model/margins for Tesla looking ahead.”
Still, the road to autonomy is littered with setbacks. Tesla’s FSD system has faced regulatory scrutiny and safety concerns for years, although Ives speculated that the close ties between Musk and President Donald Trump could help pave the way for fewer regulatory hurdles. And Musk’s timelines for autonomous Teslas have come and gone without delivery; FSD remains driver-assist tech, requiring a human at the wheel. Tesla also isn’t alone in the robotaxi push — Alphabet’s Waymo and Uber $UBER (UBER) are still major contenders in the U.S., and China’s Baidu (BIDU) is pushing forward on robotaxis abroad.
Still, Ives believes Tesla has a leg up on the competition.
“Given its unmatched scale and scope globally,” he wrote, “we believe Tesla has the opportunity to own the autonomous market and down the road license its technology to other auto players both in the US and around the globe.”
Wedbush maintains its “Outperform” rating on Tesla, even as Ives warned that the stock’s trajectory will be volatile. “Rome was not built in a day,” he wrote, “and neither will Tesla’s autonomous and robotics strategic vision.”
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