Despite the recent volatility in Tesla's stock, TD Cowen believes that it remains one of the best ways to invest in the electric vehicle market trends. The firm upgraded Tesla's stock from hold to buy, with a price target of $388 per share, indicating a potential upside of around 47.3% from Thursday's closing price. Analyst Itay Michaeli, despite Tesla trading at around 90 times forward earnings, is confident in the company's potential.
Michaeli highlighted that Tesla stands out from other automakers not just because it's an auto company, but because it is well-positioned to seize significant opportunities in the auto/mobility and related markets. He specifically pointed out Tesla's leading position in the emerging autonomous vehicle market, especially in the Consumer AV vertical, which he believes is often overlooked.
Positive Outlook and Price Target
TD Cowen has upgraded Tesla's stock from hold to buy, setting a price target of $388 per share, indicating a potential 47.3% increase from the previous close.
Tesla has faced challenges in 2025, with its stock declining by nearly 35%, including a 28% drop in February alone. Factors contributing to this decline include a yearly revenue decrease in the fourth quarter, supply chain risks from tariffs, and negative sentiment surrounding CEO Elon Musk. Despite these setbacks, analysts are divided on Tesla's outlook, with 26 out of 54 analysts rating it as a buy or strong buy, while 17 recommend holding the stock, and 12 suggest underperforming or selling.
Unique Position in the Market
Analyst Itay Michaeli emphasizes that Tesla should not be compared to traditional automakers due to its strategic position in capturing opportunities in the auto/mobility and adjacent markets, especially in the autonomous vehicle sector.
TD Cowen also named General Motors as a top pick alongside Tesla, highlighting its unique qualities such as a majority of earnings from the Truck Franchise, a strong EV accretion setup, ample growth opportunities, solid execution, and options in AV/AI technologies. The firm believes that General Motors is not a typical legacy automaker and has favorable prospects for investors.
Leadership in Autonomous Vehicles
Michaeli points out that Tesla is currently leading the way in the emerging autonomous vehicle market, particularly in the Consumer AV vertical.
Despite the ups and downs in Tesla's stock price, TD Cowen suggests that it remains a strong player in the electric vehicle market. Tesla's pioneering position in the industry, coupled with its innovative approach to technology and sustainable energy, makes it a compelling investment opportunity for those seeking exposure to the rapidly growing EV sector. While the stock may experience ups and downs, its long-term potential and market leadership position make it a standout choice for investors looking to ride the wave of the electric vehicle revolution.
Challenges Faced by Tesla
Despite its potential, Tesla has faced challenges such as a decline in revenue, supply chain risks, and negative sentiment surrounding CEO Elon Musk, leading to a 35% decrease in its stock value in 2025.
Analyst Ratings and Market Perception
Analysts' opinions on Tesla are divided, with a significant number recommending it as a buy or strong buy, while others remain cautious or bearish on the stock.
General Motors Highlighted as Top Pick
TD Cowen also identifies General Motors as a top choice, highlighting its unique strengths in the truck franchise, EV sector, growth opportunities, and buyback programs.
