TLDR
- Baird upgraded Tesla to Buy from Hold, setting highest Wall Street price target of $548
- Goldman Sachs raised Tesla price target to $395, expecting Q3 deliveries of 455,000 vehicles
- Tesla stock gained 1.1% premarket following the dual analyst upgrades
- Analysts cite Tesla’s “physical AI” potential including robotaxis and Optimus humanoid robots
- Federal tax credit expiring September 30 is driving increased EV purchases in Q3
Tesla stock surged 1.1% in premarket trading Friday as two major Wall Street firms boosted their outlook on the electric vehicle maker. The gains followed separate analyst actions highlighting Tesla’s evolving business model.
Baird analyst Ben Kallo delivered the most bullish assessment, upgrading Tesla to Buy from Hold. His new $548 price target represents a massive 71% increase from his previous $320 target, establishing the highest Wall Street forecast for Tesla shares.
Physical AI Revolution Drives Upgrade
Kallo’s upgrade centers on Tesla’s transformation into what he calls a “physical AI” leader. The analyst sees major catalysts ahead including expanded robotaxi services, the Optimus humanoid robot unveiling, and Tesla’s growing energy storage business.
Tesla’s traditional automotive business has struggled recently. Global vehicle sales dropped 13% in the first half of 2025. However, Kallo believes investors are increasingly focused on Tesla’s future technologies rather than current car sales.
The analyst noted that Tesla’s proposed executive compensation package reflects “lofty targets” tied to ambitious growth milestones. The board’s $1 trillion pay package for CEO Elon Musk over the next decade depends on achieving specific goals in earnings, vehicle deliveries, robotaxis, and humanoid robot production.
Goldman Sachs Boosts Q3 Delivery Forecast
Goldman Sachs analyst Mark Delaney took a more measured approach, raising his price target to $395 from $300 while maintaining a Hold rating. His optimism stems from better-than-expected third-quarter vehicle delivery prospects.
Delaney expects Tesla to deliver 455,000 vehicles in Q3, beating the Wall Street consensus of 445,000. Tesla delivered 384,000 vehicles in Q2 2025, down from 463,000 in Q3 2024.
The improved delivery outlook partly reflects the upcoming expiration of the $7,500 federal EV tax credit on September 30. Tesla has urged customers to complete purchases before month-end to avoid paying higher prices.
Stock Performance and Market Position
Tesla shares have gained 7% year-to-date, underperforming broader market indices but posting 83% gains over the past 12 months. The stock recently ended a seven-day winning streak that delivered 23% gains.
Recent positive momentum included Musk’s $1 billion stock purchase disclosed Monday and Wednesday’s Federal Reserve rate cut. Lower interest rates benefit automakers by reducing monthly payment costs for financed vehicles.
Tesla appears poised to expand its robotaxi service to Las Vegas following the June launch in Austin, Texas. The service represents a key component of Tesla’s autonomous driving strategy.
The average analyst price target for Tesla currently sits at $334, up from $323 a week ago but still below current trading levels. About 45% of analysts covering Tesla rate shares as Buy, compared to 55% for the average S&P 500 stock.
