Tesla Rose 4.4% As Piper Sandler Raises Tesla Price Target To $500

Tesla rose 4.4% as Piper Sandler raises Tesla price target to $500.

Tesla is primed for growth due to its lead in AI, despite a crop of “fast followers” eager to copy the EV makers’ designs in China, according to Piper Sandler.

The investment firm, which has an overweight rating on shares, raised its price target to $500 from $400. That implies about 17% upside from Friday’s close.

“Vertically integrated Chinese OEMs may be Tesla’s #1 competitive threat. But when it comes to ‘real world’ A.I., these companies look to Tesla for guidance – not the other way around,” analyst Alexander Potter said Sunday in a note to clients.  

That AI technology powers Tesla’s robo-taxi fleet and its Optimus humanoid robots—two businesses that are poised to grow the company’s bottom line over the next few years. Tesla’s robo-taxi business, for example, is already expanding into the Bay Area in California and Austin, Texas.

“At some point in the next year or so, we think investors will start focusing on the size of the FSD-equipped fleet, rather than the number of new deliveries sold into the fleet each quarter,” Potter said.

Tesla’s monetization of already sold vehicles, he added, could boost the EV maker’s valuation as well.   

“It’s true that the fleet size depends on continued sales, but there are millions of existing Tesla vehicles on the road that Tesla can monetize, regardless of new delivery trends.” Potter wrote.

Although Piper Sandler’s latest Tesla call is bullish, Wall Street analysts are divided on the Elon Musk-owned company. Twenty-four analysts have rated Tesla a buy or strong buy, while 19 analysts have assigned the stock a hold rating and 11 have given it an underperform or sell rating.