Tesla's TSLA growing focus on robotics and autonomous taxis is becoming increasingly central to its long-term growth story, prompting a more constructive view among some analysts. Reflecting this shift, J.P. Morgan recently upgraded the company to "neutral" from "underweight," as quoted on Reuters.
TSLA, which fell about 1.24% on Thursday, traded in the green territory in pre-market hours. So far this year, TSLA is down around 4.3%. However, since early April, the company has added about 23%.
J.P. Morgan noted that Tesla's valuation is being driven more by its ambitions in autonomous driving and robotics than by its near-term earnings outlook. The brokerage noted that investor attention is shifting away from Tesla's near-term challenges in the EV market and toward its emerging growth drivers. These include robotaxis, humanoid robotics, AI hardware and software-based services, which could become major contributors to the company's earnings over the next decade.
The key takeaway for investors remains clear: Tesla is a long-term play, not a vehicle for short-term bets.
More Into J.P. Morgan’s Upgrade
As quoted on the abovementioned Reuters article, J.P. Morgan believes Tesla's earnings trajectory could improve significantly beyond 2028, with the company’s EPS potentially rising to approximately $7.50 by 2030 from around $1.95 in 2026. Revenues are projected to surge from approximately $95 billion in 2025 to $203 billion by the end of the decade, with autonomy, robotics and related services accounting for nearly half of the anticipated growth.
J.P Morgan analyst, Rajat Gupta, as quoted on the Reuters article, estimates that Tesla's exposure to automotive, energy storage, robotaxis, humanoid robots and infrastructure licensing gives it access to a combined addressable market of roughly $3.9 trillion by 2035, reinforcing the company's appeal as a long-term AI and robotics play.
However, the brokerage cautioned that investing in Tesla is far from risk-free. While it sees substantial long-term potential in the company's autonomy and robotics initiatives, it also warned that significant execution risks remain, particularly around securing regulatory approvals, safety concerns and scaling emerging technologies.
For Tesla Investors, the Musk Factor Matters
Investing in Tesla is, to some extent, also a bet on Elon Musk and his ability to execute on ambitious, transformative technologies. Investor sentiment toward Tesla often reflects confidence in Musk's broader vision and track record across multiple ventures, a theme highlighted in the abovementioned article.
Beyond advancing Tesla's initiatives in AI, robotics and autonomous driving, Musk's SpaceX moves toward a potential public listing at a valuation of roughly $1.75 trillion. Such a milestone would make SpaceX the second Musk-led company valued at over $1 trillion.
More on TSLA Stock
Tesla currently has an average brokerage recommendation (ABR) of 2.49 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations made by 43 brokerage firms. Of the 43 recommendations deriving the current ABR, 16 are Strong Buy and two are Buy. Strong Buy and Buy, respectively, account for 37.21% and 4.65% of all recommendations. A month ago, Strong Buy made up 37.21%, while Buy represented 4.65%.
The market seems to be taking on a positive stance toward the stock, with ABR falling to 2.49 from 2.75 a couple of months ago. The majority of analyst ratings remain at Strong Buy, Buy and Hold, outnumbering Strong Sell and Sell calls. This suggests brokerages are cautiously optimistic, willing to wait and see how the stock plays out, rather than turning outright bearish on the company. Strong Sell recommendations fell from 22.7% of all recommendations from a couple of months ago to 14% currently.
Based on short-term price targets offered by 35 analysts, the average price target for Tesla comes to $401.77, with the forecasts ranging from a low of $123.00 to a high of $600.00. Currently, TSLA stock is priced at $418.45 (as of market close on June 4) and has a Zacks Rank #4 (Sell), along with a Growth Score of A.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tesla-Heavy ETFs to Consider
Here, we have highlighted ETFs with exposure to Tesla.
Simplify Volt TSLA Revolution ETF TESL has an exposure of 50.29%.
Consumer Discretionary Select Sector SPDR Fund XLY has an exposure of 19.87%.
Global X PureCap MSCI Consumer Discretionary ETF GXPD has an exposure of 19.2%.
Fidelity MSCI Consumer Discretionary Index ETF FDIS has an exposure of 17.64%.
Vanguard Consumer Discretionary ETF VCR has an exposure of 15.79%.
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Tesla, Inc. (TSLA): Free Stock Analysis Report
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Global X PureCap MSCI Consumer Discretionary ETF (GXPD): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).