Price Target Surges 227%. JPMorgan Shifts From Years of Bearishness, What Value Does It See in Tesla?

TradingKey - JPMorgan ( JPM) has upgraded Tesla ( TSLA) from "Underweight" to "Neutral" and significantly raised its price target from $145 to $475, an increase of over 227%.

The rating adjustment was led by a team of analysts under Rajat Gupta, who took over research coverage of Tesla last month. The report, released Friday, noted that investors are looking beyond Tesla's slowing core electric vehicle business to focus on future growth engines such as robotaxis, humanoid robots, AI chips, and software services, which are expected to reshape the company's profit structure over the next decade.

JPMorgan emphasized in the report that Tesla's high degree of vertical integration across hardware and software is its core competitive advantage, though the market currently still underestimates and misunderstands this to some extent.

Gupta broke down Tesla's valuation into five interconnected markets: automotive, energy storage, robotaxis, humanoid robots, and infrastructure licensing, estimating that the total potential addressable market for these five segments will reach approximately $3.9 trillion by 2035.

Meanwhile, JPMorgan expects Tesla's earnings per share to hit a clear inflection point after 2028, jumping from approximately $1.95 in 2026 to about $7.50 in 2030, a nearly threefold increase. On the revenue side, JPMorgan expects Tesla's revenue to grow from approximately $95 billion in 2025 to about $203 billion in 2030—more than doubling—with nearly half of that growth coming from services and emerging businesses related to autonomous driving and robotics.

Despite the shift toward a more optimistic tone, JPMorgan also cautioned that execution risks for Tesla remain high, particularly concerning regulatory approvals, safety verification, and the large-scale deployment of new technologies.

This upgrade comes as multiple technology ventures under Elon Musk advance simultaneously. Musk is pushing for an IPO of SpaceX, with an estimated valuation of approximately $1.7 trillion, potentially making it the largest IPO in history; the market expects the listing as early as June 12.

Wall Street Divided on Tesla

Wall Street investment banks, however, are sharply polarized in their views on Tesla.

Staunch bulls, represented by Wedbush Securities, are driving the most optimistic sentiment on Wall Street. Analyst Dan Ives maintained a Street-high price target of $600 (corresponding to a market cap expectation of over $2 trillion), emphasizing that investors have severely underestimated Tesla’s ongoing "historic AI transformation" and optimistically forecasting that robotaxis will see an accelerated rollout in over 30 U.S. cities within 2026.

Piper Sandler and TD Cowen also set price targets of $500 and $519, respectively, with their core logic predicated on high conviction in the commercialization potential of autonomous driving; the latter is particularly bullish on the long-term prospects of disrupting the ride-sharing market based on Cybercab's ultra-low operating cost of approximately $0.30 per mile.

By contrast, Morgan Stanley ( MS) acknowledges the long-term value of humanoid robots and AI, but given intensifying competition in the global electric vehicle market and slowing delivery growth, it maintains only an "Equal-Weight" rating with a price target of $425.

Goldman Sachs ( GS) analyst Mark Delaney noted that Tesla's capital expenditures are expected to surge to over $20 billion in 2026, and the massive investment in AI training compute could cause full-year free cash flow to turn negative, leading him to set a price target of $405.

Tesla’s AI Transformation: Vision vs. Reality

From a broader industry perspective, amid the rapid advancement of AI technology, traditional valuation metrics like P/E and P/B ratios have become less effective at capturing the long-term growth potential of technology companies, and investors are increasingly focusing on a company's positioning and competitiveness in frontier sectors such as AI and autonomous driving.

Leveraging its leading position in autonomous driving technology, AI chip development, and humanoid robotics, Tesla is increasingly being viewed by the market as a technology firm rather than a traditional automaker—a shift in perception that is poised to command a higher valuation premium for the company.

Notably, while Wall Street has closely monitored Tesla's AI pivot, the commercialization of its initiatives in these sectors remains in the early stages, facing a myriad of challenges including technical maturity, regulatory hurdles, and market adoption.

For instance, while Tesla's Robotaxi business has made R&D strides, achieving large-scale commercial operation requires addressing issues such as autonomous driving safety, legal and regulatory compliance, and cost control. Similarly, its humanoid robot, Optimus, remains at the prototype stage and has a long way to go before reaching actual commercial application.