Tesla Gets Major Boost Baird Upgrades to Outperform, Hikes Target to $548

Tesla (TSLA, Financials) received an upgrade from Baird on Friday, with analyst Ben Kallo raising the rating to outperform and lifting the price target from $320 to $548.

Kallo said Tesla is increasingly being valued as a physical AI company rather than a traditional carmaker. While recent quarters have shown weak electric vehicle sales, investor focus has shifted to the company's future in robotics and autonomous mobility.

Baird's base scenario is that by 2035, Tesla will have sold 20 million cars, had 10 million active full self-driving subscriptions, deployed one million robotaxis, and sold one million Optimus robots for $20,000 apiece, making a 50% gross profit. If this happens, Baird thinks Tesla's market valuation may go beyond $5.5 trillion, which would mean a share price of nearly $1,412 after accounting for dilution.

In a bullish scenario where Tesla doubles those milestones, the firm projects a market cap of $12 trillion, with the stock potentially trading at $3,043. Kallo emphasized that this is not Baird's base case but illustrates the upside if Tesla scales its AI products.

Tesla shares have gained 22.6% over the past month but were down 2.1% on Thursday. The next catalyst for investors will be Tesla's progress on robotaxi launches and updates on its Optimus program.