Tesla (TSLA) rose more than 5% yesterday and is now up 72% over the past six months. Following the strong rally, Melius Research analyst Rob Wertheimer initiated coverage on Tesla with a Buy rating and a $520 price target, calling the stock “a must-own.” The price target of $520 implies a potential upside of 19% from current levels. Wertheimer believes Tesla is set to lead the next major wave of change powered by artificial intelligence.
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Tesla Seen as the Main Winner from the AI Boom
The analyst said Tesla is in the best position to benefit from the coming AI revolution, which will first transform the auto industry. He explained that while most companies struggle to keep up with growing computing needs, Tesla and Elon Musk’s network of companies have learned to manage and use it effectively.
Wertheimer praised Elon Musk’s group of companies, Tesla, SpaceX, and xAI, for their unmatched speed in creating and testing new technology. He noted that xAI is rolling out new data centers faster than almost anyone else in the AI industry.
The analyst also pointed to Tesla’s flexible approach, recalling how building cars in tents once looked risky, but proved successful. He said Tesla’s quick design process, tight supply chain control, and readiness to take big risks continue to set it apart from traditional automakers.
Self-Driving Is Just the Beginning
At the same time, Wertheimer said autonomous driving marks Tesla’s first major step in applying AI to the real world. He believes Tesla can keep improving its self-driving technology faster than any competitor because of its deep experience in both hardware and data.
“Tesla can quickly improve and scale autonomy in driving,” he wrote, adding that this is just the start of broader AI changes that will spread through many industries in the next decade.
Still, Wertheimer noted that Tesla’s road to full autonomy will take time. He also warned that soft EV demand could weigh on near-term results.
Is Tesla Stock a Good Buy Right Now?
On TipRanks, TSLA stock has a Hold consensus rating based on 16 Buys, 13 Holds, and nine Sell ratings. The average Tesla price target of $365.88 implies 16.1% downside potential from current levels. Year-to-date, TSLA stock has gained 7.9%.
