Gene Munster predicts a major rebound for Tesla Inc. in 2026, despite expecting a dip in the company’s earnings per share (EPS) and revenue estimates for the year. Munster suggests that Tesla’s 2025 performance is largely irrelevant to investors, as the year is setting the stage for a significant recovery in 2026 and beyond.
What to Expect in 2025 and 2026
Munster anticipates a 10% decline in deliveries, which make up about 75% of Tesla’s business, in 2025. However, he predicts a 35% growth in deliveries in 2026, supported by an improving EV outlook, a healing brand, and the launch of a new model. In a recent statement, Munster said: “Elon’s message last quarter was that it’s all about 2026, and I’d expect he doubles down on that.”
Long-Term Investment Potential
Although revenue is expected to be soft and automotive gross margins may decline in 2025, Munster remains optimistic about Tesla’s long-term investment potential. He emphasizes Tesla’s potential to lead in physical-world AI, autonomy, and robotics as crucial drivers of its future success. Munster also highlights that Tesla concluded 2024 with $37 billion in cash, cash equivalents, and investments, offering further confidence in the company’s financial stability.
Confidence in Tesla’s Future
Munster believes that Elon Musk will reaffirm his confidence that the transition to real-world AI and autonomy is unfolding faster than most expect, and that Tesla’s product lineup is well-positioned to lead throughout the coming decade. Despite a projected non-GAAP EPS for 2026 that is still below the Street’s estimate, Munster emphasizes that Tesla’s earnings are more than sufficient to finance its transition to real-world AI and autonomy.
Why It Matters
Tesla’s recent struggles include a sales slump and scaled-back Cybertruck production. However, analysts like Alexander Potter from Piper Sandler believe in Tesla’s future growth potential, especially from robotaxis and new products. Munster’s predictions align with this optimistic outlook, suggesting that the current struggles are temporary and that a major rebound is on the horizon.
Current Stock Performance
Year-to-date, Tesla stock has lost more than 36%. The company’s momentum rating is 92.50% and its growth rating is 67.70%. For an in-depth report on more stocks and insights into growth opportunities, investors can look into proprietary edge rankings and growth metrics that evaluate a stock’s historical earnings and revenue expansion.
Conclusion
In conclusion, Gene Munster’s predictions suggest that Tesla is positioned for a significant rebound in 2026 and beyond. Despite current struggles, the company’s potential to lead in physical-world AI, autonomy, and robotics, as well as its strong financial stability, make it an attractive long-term investment opportunity. As the company continues to navigate its transition to real-world AI and autonomy, investors can expect a major rebound in the coming years.