Tesla Inc. stock has been upgraded by an analyst following the announcement of a new pay package for CEO Elon Musk, which creates opportunities for shareholders.
The Tesla Analyst
Baird analyst Ben Kallo upgraded Tesla stock from Neutral to Outperform and raised the price target from $320 to $548.
Analyst Takeaways
While Tesla’s vehicle segment has faced setbacks and declines, investors are likely looking to other segments of the company and future growth. According to Kallo, “Investor inbounds regarding long-term initiatives lead us to believe focus has increasingly shifted to the future for TSLA.”
The analyst believes there could be a “physical AI inflection ahead,” with Tesla now viewed as a leader in the AI sector. The new proposed pay package for Musk has lofty goals and creates new incentives for Musk and the company for the next decade.
Pay Package Milestones
Kallo breaks down the pay package milestones, which are based on Tesla’s market cap, product goals around:
- Vehicle deliveries
- FSD subscriptions
- Optimus Bot deliveries
- Robotaxis in operation
- Adjusted EBITDA
Assuming Tesla achieves these milestones in 2035, Kallo sees a pathway for Tesla’s market cap to exceed $5.5 trillion. Based on comments from Tesla regarding its future revenue drivers and opportunities, as well as the new pay package milestone, Kallo estimates that Tesla stock could be worth between $1,400 and $3,000 in 2035.
Upcoming Catalysts
Items highlighted by Kallo in the report include:
- Robotaxis
- Musk’s pay package getting approved
- The next generation of Optimus revealed
- Growth of the Tesla Energy business
- Launch of the Tesla Semi
- More affordable electric vehicles
The analyst believes all these items are events that “could move the stock.” The recent purchase of around $1 billion in Tesla stock by Musk is also highlighted as “a positive sign.”
Current Price Action
Tesla stock is up 1.5% to $423.29, versus a 52-week trading range of $212.11 to $488.54. Tesla shares are up 11.6% year-to-date in 2025.
Kallo concluded that Tesla has “lots of irons in the fire” and numerous projects that can help with revenue growth, stating “The road ahead is chock-full of catalysts.”