Tesla remains the most undervalued AI play amid regulatory shifts, says Wedbush
Investing.com– Tesla Inc (NASDAQ:TSLA) is poised for significant gains as the incoming Donald Trump administration signals an acceleration of regulatory support for artificial intelligence and autonomous vehicles, Wedbush analysts said, adding that Tesla remains the most undervalued AI play in the market as of date.
There is potential for a friendlier regulatory environment on Tesla’s AI-driven ventures, particularly its Full Self-Driving (FSD) technology and autonomous Cybercab initiatives, Wedbush analysts said in a note.
Wedbush highlighted the likelihood of the Trump administration establishing a federal framework for autonomous vehicles as a priority, potentially clearing long-standing regulatory hurdles for Tesla. Analysts predict these changes could unlock up to $1 trillion in AI value for Tesla, bolstering its trajectory toward a $2 trillion valuation within 18 months.
The analysts reiterated an Outperform rating on Tesla, with a 12-month price target of $400.
“Musk’s significant influence in the Trump White House is already having a major influence and ultimately the golden path for Tesla around Cybercabs and autonomous is now within reach with an emboldened Trump/Musk strategic alliance playing out in real time and very in line with our thesis,” Wedbush analysts wrote.
The research note also suggested the potential creation of an “AI Czar” role within the government, which could catalyze broader AI advancements in the tech industry. For Tesla, the timeline for achieving its AI and autonomous vehicle goals could be expedited, aligning with competitive pressures from China’s advancements in autonomous technology, according to Wedbush.
The anticipated removal of EV tax credits under Trump’s policies pose as a challenge for the broader industry. However, the analysts view Tesla as uniquely positioned to navigate this environment due to its scale and dominance in the electric vehicle market, making it less reliant on subsidies.
Tesla’s strategic pivot toward AI and autonomy reinforces its position as a leading disruptive technology company, not merely an automaker, the analysts said. Investors are closely watching regulatory developments, as they could have far-reaching implications for Tesla’s growth and market leadership in the autonomous space.
“Now the next step in this broader Tesla strategic vision begins which is the autonomous and AI era as we believe Tesla remains the most undervalued AI play in the market today,” the analysts added.