Tesla Inc shares are gaining ground, thanks to an update on the company’s Full Self-Driving technology progress. This sudden uptick has sparked interest in the investing community, with analysts weighing in on the stock’s potential.
Key Developments
- Full Self-Driving Technology: Piper Sandler analyst Alexander Potter shared an update on Tesla’s FSD progress, reaffirming his Overweight rating on the stock with a $500 price target.
- FSD Community Tracker: The tracker’s key metric, “miles to critical disengagement,” showed a dramatic improvement following the release of FSD v14.1.x in October, with performance jumping more than 20-fold.
- Austin Data: Data from Austin suggests FSD vehicles could average 40,000 miles between crashes, based on seven NHTSA-reported incidents across roughly 280,000 miles.
Analyst Insights
- Piper Sandler: Potter highlighted the improvements in FSD technology, but cautioned that not every critical disengagement necessarily prevents an accident.
- Morgan Stanley: Analyst Andrew Percoco downgraded the stock to Equal-weight from Overweight, citing the firm’s 2026 auto industry outlook, which predicts an extended “EV Winter” lasting through 2026.
- Valuation: Percoco believes Tesla shares are fairly valued at current levels, but notes that high expectations on the company’s non-auto business have brought the stock closer to fair valuation.
Market Outlook
- US EV Sales: Morgan Stanley expects US EV sales to fall about 20% year-over-year in 2026, pressured by the expiration of the $7,500 federal EV tax credit, affordability challenges, and consumer hesitation.
- Tesla’s Prospects: Piper Sandler expects Tesla’s rapid progress on FSD to carry the stock higher next year, projecting EPS of $2.78, revenue growth of 16%, and EPS growth of 54% for 2026.
Stock Performance
- TSLA Price Action: Tesla shares were up 1.37% at $445.60 at the time of publication on Tuesday.