UBS analyst Joseph Spak has revised his price target for Tesla (TSLA, Financial) and raised it to $226 from $197. However, the firm has retained a ‘Sell' rating. This adjustment comes amid skepticism over the valuation of Tesla's artificial intelligence initiatives, including robotaxis and the humanoid robot, Optimus. Spak says that such AI ventures add close to $1 trillion to Tesla's market capitalization, which he deemed “excessively speculative.”
Spak's analysis suggests Tesla's auto and energy divisions account for about $52 per share, with the remainder attributed to AI-related optimism. Historically, Tesla's stock has experienced sharp corrections of 30-70% when its auto segment's tangible value approaches 10% of the total valuation, a level it recently surpassed at 12%
While Spak is cautious about this projection, Wedbush Securities' Dan Ives said that Tesla is arguably the most undervalued AI play, pointing to FSD tech as a $1 trillion opportunity. At the same time, Morgan Stanley re-affirmed ‘Buy' for Tesla, pointing out that it has the best self-driving tech and the ability to respond to pro-charging policy in the USA.
