Tesla Stock Remains Piper Sandler’s ‘#1 Buy and Hold Idea’ By Investing.com

Investing.com – Tesla continues to be Piper Sandler’s “#1 buy-and-hold proposition,” with the firm raising its price target to $500 from $315.

The firm’s analysts believe investors are beginning to appreciate Tesla’s (NASDAQ: ) potential in “real-world AI,” prompting portfolio managers to seriously consider outliers.

In a recent memo, Piper Sandler said it examined more than a dozen Tesla-specific data sets.

Despite concerns over recent financial issues, particularly vehicle shipping and automotive gross margins, the long-term outlook is said to be promising.

“We expect Tesla to deliver 1.96M units in 2025 (up from 1.79M in 2024), but we expect >100k additional units to come from unknown vehicles and another 70k additional units from the Cybertruck,” Piper Sandler said.

However, they caution that this prediction is uncertain and the potential harm may not be clear until a later update.

On the gross margin front, Piper Sandler maintains a more positive outlook in anticipation of a strong post-quarter performance as Tesla continues to roll out new product launches.

Looking ahead, Piper Sandler adjusted its long-term delivery outlook, now predicting Tesla will grow to around 4.6 million units in 2032.

They believe the focus will shift from launching new cars to the popularity of fully self-driving (FSD) software.

Tesla’s existing businesses, including FSD, are valued at less than $300 per share, the analysts said.

For valuation, Piper Sandler is moving to a P/E-based methodology with their $500 price target based on 120x FY26E EPS.

Expect investors to gain more clarity on Tesla’s production efficiency over the course of the year, allowing it to focus on things like FSD effectiveness and Tesla’s broader AI ambitions.