Quick Summary
- Bank of America upgraded Tesla from Hold to Buy, setting a $460 price objective.
- The investment bank identified Tesla as “the current leader in consumer autonomy.”
- BofA estimates Tesla’s Optimus humanoid robot division at more than $30 billion and Energy operations at $90 billion.
- Analyst Buy ratings for Tesla stand at 44%, trailing the S&P 500’s 55% average.
- Shares climbed 2% in early Wednesday trading but still show a 13% year-to-date decline.
Tesla (TSLA) stock gained momentum during early Wednesday trading following Bank of America’s reinstatement of coverage with a Buy recommendation and $460 price objective, pushing shares up approximately 2% to $400.27.
The positive call arrived during a challenging period for the electric vehicle manufacturer. Shares had declined 9% following the company’s fourth-quarter earnings report on January 28, which actually exceeded expectations, and showed a 13% year-to-date loss entering Wednesday’s trading session.
BofA’s Alex Perry characterized Tesla as “the current leader in consumer autonomy,” highlighting the company’s Full Self-Driving technology as the cornerstone for what analysts anticipate will transform into a robo-taxi operation.
Tesla’s FSD subscription service costs $99 monthly and can manage the majority of standard driving tasks for vehicle owners. BofA views this consumer-oriented technology as the pathway toward a more extensive autonomous transportation network.
The automaker initiated robo-taxi operations in Austin, Texas, last June and intends to roll out services across nine metropolitan areas during the first six months of 2026.
Wall Street’s consensus price target for Tesla currently stands at $427. BofA’s $460 projection exceeds that benchmark, indicating greater optimism compared to the broader analyst community.
However, analyst opinion on Tesla remains divided. Only 44% of analysts tracking the company assign it a Buy rating — notably below the approximately 55% Buy-rating percentage typical for S&P 500 constituents.
Tesla trades at a P/E multiple of 363, and InvestingPro’s Fair Value model suggests the stock appears overvalued at present prices. Nevertheless, five analysts have recently increased their earnings projections for the next reporting period.
Optimus Robotics and Energy Divisions Command Significant Valuations
Bank of America dissected Tesla’s worth across different business units. The investment firm assigns a valuation exceeding $30 billion to Tesla’s Optimus humanoid robot initiative, representing roughly 2% of the company’s $1.47 trillion market capitalization.
Optimus robots are projected to first enter manufacturing environments, potentially replacing segments of the approximately 13 million manufacturing positions in the United States, before eventually expanding into residential applications.
Tesla’s Energy division, encompassing residential Powerwall battery systems and utility-scale Megapacks for power companies and data centers, received a $90 billion valuation from BofA, accounting for 6% of the total enterprise value.
Latest News and Developments
Not all developments favor Tesla’s outlook. GLJ Research maintained its Sell recommendation on the stock, expressing skepticism regarding the commercial feasibility of the Optimus robot program.
Additionally, a federal judge denied Tesla’s motion to reverse a $243 million jury award connected to a 2019 fatal accident involving Autopilot, determining that evidence substantially backed the jury’s initial verdict.
On a more positive note, Tesla announced a 55% year-over-year increase in vehicle registrations throughout France, suggesting potential market stabilization in Europe following two consecutive years of sales decreases. Norwegian markets also demonstrated growth.
Despite current year-to-date headwinds, Tesla shares had climbed 44% over the preceding 12-month period as of Wednesday’s opening bell.
