Tesla Inc. stock has seen an uptick thanks to two main factors, according to Gary Black, Managing Partner of The Future Fund.
TSLA Stock Drivers
The first catalyst is the growing optimism that Tesla, along with a few other companies, is nearing a breakthrough in unsupervised autonomy. This development has the potential to significantly impact the company’s future growth.
The second factor is the strong belief that shareholders will approve CEO Elon Musk’s $1 trillion compensation package at the upcoming Annual Meeting. This package has been a subject of discussion among investors and analysts, with some viewing it as a bold incentive that could lead to substantial value creation if Tesla meets its outlined metrics.
Two catalysts are pushing $TSLA higher:
- Increasing optimism that TSLA (and a few others) are on the verge of solving for unsupervised autonomy;
- Conviction that shareholders will again overwhelmingly approve Elon’s comp package at next week’s Annual Meeting.
Still Cautious
Despite these positive developments, Black remains cautious due to Tesla’s extended valuation, which is projected to have a 2026 price-to-earnings (PE) ratio of approximately 200x compared to an annual long-term earnings growth of 35%. Black states that investors might be overly optimistic about the speed at which Tesla can deploy Level 4 and Level 5 unsupervised robotaxis across other states without safety monitors.
The analyst has a 6-12 month price target of $310 for the Tesla stock, implying a downside of 32% from the current closing price.
State Of Tesla’s Robotaxis
Currently, Tesla’s robotaxis are operational only in Austin and the San Francisco Bay Area, with 150 robotaxis in service. The major catalyst for Tesla’s future growth is the removal of safety monitors from all robotaxis, a move that would indicate an imminent scale-up. Musk has set a target to achieve this in Austin by the end of the year.
Tesla’s Q3 Performance
Black’s comments come on the heels of Tesla’s third-quarter results, which showed record electric vehicle deliveries but also highlighted declining profits. Analysts remain divided on the company’s future, with some predicting significant stock price increases. The endorsement of Musk’s compensation package by the State Board of Administration of the Florida Retirement System has further bolstered investor confidence.
The agency, which manages over $280 billion in assets, views Musk’s pay structure as a bold incentive that could lead to substantial value creation if Tesla meets its outlined metrics.