Tesla could reach $2 trillion in market cap by end of 2026 as autonomous era begins in Austin, says Dan Ives

Wedbush analyst Dan Ives reiterated an outperform rating and $500 price target on Tesla, citing the company's autonomous vehicle initiatives as a key driver for future growth. Ives believes Tesla's market cap could reach $2 trillion by the end of 2026, driven by the launch of robotaxis and full-scale production of Cybercabs, and anticipates favorable regulatory changes under a potential Trump administration to further accelerate Tesla's autonomous ambitions, viewing Tesla as the most undervalued AI play in the market.

Analysis

Wedbush analyst Dan Ives has reiterated an "outperform" rating and a $500 price target for Tesla (TSLA), signaling a potential upside of over 55% from its Wednesday closing price of $322.05. This bullish assessment, issued in a Friday note, contrasts sharply with Tesla's year-to-date stock performance, which has seen a decline of over 20%. Ives's conviction stems from the view that Tesla is the "most undervalued AI play in the market today," with the imminent launch of approximately 20 Model Y robotaxis in Austin marking the start of its "golden era of autonomous." He projects that the expansion of robotaxi services to roughly 25 U.S. cities in the next year, coupled with full-scale production of Cybercabs beginning next year, could drive Tesla's market capitalization from its current level of approximately $1 trillion to $2 trillion by the end of 2026, with the AI and autonomous segment alone valued at $1 trillion. Ives also anticipates a more favorable federal regulatory environment for autonomous vehicles under a potential Trump administration, which he believes would support Tesla's ambitions by aiming to keep the U.S. ahead of China in the AI race. Despite Tesla shares rising over 1% in premarket trading following the note, broader analyst sentiment on the stock is mixed: of 55 analysts surveyed by LSEG, 25 rate it a buy or strong buy, 19 have a hold rating, and 11 recommend underperform or sell.

Key Decisions for Investors

• Investors with a high-risk tolerance and long-term outlook may consider Wedbush's $500 price target, focusing on Tesla's execution of its autonomous vehicle strategy and AI monetization as primary value drivers.
• Closely monitor key catalysts including the robotaxi service rollout and expansion, Cybercab production milestones, and any shifts in U.S. federal autonomous vehicle regulations, as these will be crucial in validating the projected $2 trillion market capitalization.
• Balance Wedbush's pronounced bullish thesis against Tesla's significant year-to-date stock decline and the divided sentiment among the broader analyst community when making investment decisions or adjusting portfolio allocations.