- Investors are bracing for Tesla's second-quarter earnings report on Tuesday.
- Wall Street analysts are bullish on updates about the firm's Robotaxi and FSD technology.
- Tesla's energy business could also be key to its long-term growth, strategists said.
Wall Street is eagerly awaiting Tesla's second-quarter results, with analysts eyeing better days ahead after a difficult first quarter for the company.
Elon Musk's car company had a tough start to the year, thanks to sagging EV demand and rising competition for EVs in China, while controversy over Musk's monumental pay package also weighed on investor sentiment.
Yet, many of the strongest headwinds look to have subsided, Wall Street analysts say, with deliveries beating estimates in the second quarter, and a recent shareholder vote putting some of the drama surrounding Musk's compensation to bed.
Investors now are eagerly waiting on key updates from the company, with all eyes on Tesla's Robotaxi Day in early October.
Here's what analysts expect from Tesla when it reports its second-quarter earnings results on Tuesday.
Wedbush: "Worst in the rear-view mirror"
Tesla looks to be about done with price cuts, and EV demand is set to improve over the coming year. There are solid signs that the "Tesla Turnaround" is starting, Wedbush Securities said in a note.
"The key for Tesla's stock looking ahead is the Street recognizing that Tesla is the most undervalued AI play in the market in our view with a historical Robotaxi Day ahead for Musk and Tesla," analysts added.
The full self-driving Robotaxi, which Musk has teased for months, could be the "yellow brick road" to other FSD car models in the future, the firm said. Tesla further developing its AI technology could put the company on the path to a $1 trillion valuation, Wedbush estimated — something that hasn't been hindered by the firm pushing out its highly-anticipated Robotaxi day to October.
The firm maintained its "outperform" rating and $300 price target, implying 35% upside from the stock's current levels.
CFRA Research: "All eyes" on the coming Robotaxi
Tesla's Robotaxi Day will likely outshine the actual earnings report, CFRA senior stock analyst Garrett Nelson said in a note, adding that he foresaw "long-term growth" ahead for the EV maker.
"The stock continues to ride a wave of positive momentum following its annual meeting in mid-June, at which shareholders re-approved Musk's 2018 compensation plan. At the meeting, we think Musk successfully shifted investor focus to long-term opportunities in AI, robotics, energy storage, and other business lines, diverting attention away from near-term challenges," he added.
Nelson maintained a "buy" rating on Tesla and raised his price target for the stock to $250 a share, implying 4% upside from current levels.
Morgan Stanley: "It's not just an auto company"
Tesla beating deliveries estimates last quarter marks one of the company's "first and only" positive surprises so far this year, Morgan Stanley analysts said.
But the firm's most positive update at its annual meeting was that its energy business reported record-high energy storage for the second quarter, which could be a major tailwind for the company, the banks's research division said.
"As Gen AI acceleration spurs a multigenerational increase in energy demand, electricity generation, and data center investment, we believe investors will begin to pay more attention to Tesla Energy, which we value at $36 per Tesla share ($130bn) as the business uniquely positioned to benefit from investment in the US electric grid accelerated by the AI boom," analysts said in a July note.
The bank's research division maintained its "overweight" rating on the stock and issued a price target of $310 per share, implying 30% upside from current levels.
Oppenheimer: "AI platform remains at the center"
Artificial intelligence remains key to Tesla's growth story, according to Oppenheimer.
Tesla's full-self driving technology, for instance, could potentially raise earnings per share by $1-$2 a year through the end of the decade, analysts estimated in a recent note. Meanwhile, the firm could reap as much as $1.7 billion in value from its Robotaxi market, the note added.
"While TSLA delayed its AI, driving some modest softness in shares, we believe the value of its AI platform remains at the center of the TSLA valuation debate," analysts said. "We continue to believe TSLA's data collection advantages and neural network are critical assets supporting the company's leadership position in commercializing autonomous driving technology."
The company, though, could face some obstacles regarding its FSD technology, due to regulatory guardrails surrounding full self-driving vehicles, analysts said.
The firm maintained its "perform" rating on the stock.
Morningstar: Stock is "slightly overvalued"
Tesla's valuation is overstretched, with the stock priced around 20% above its fair value, according to Morningstar.
"Accordingly, we recommend investors wait for a larger pullback and for shares to trade below our fair value estimate with a solid margin of safety before we recommend a good entry point into the stock," Seth Goldstein, a stock strategist at Morningstar, said in a recent note.
The firm said it would continue to look out for updates on Tesla's Robotaxi and its more-affordable vehicle, which is expected to be released in the coming years.
A more affordable Tesla option will be key to driving the firm's deliveries growth, Goldstein added.
"As such, it would not surprise us to see Tesla's deliveries remaining fairly flat in 2025 compared with 2024 levels, but we expect a return to growth in 2026 with the start of affordable vehicle deliveries," he said.
The firm maintained its three-star rating on Tesla stock and assigned a fair value of $200 per share, implying 20% downside.