Enough has changed recently Tesla (NASDAQ:TSLA) that a well-known Wall Street analyst just raised his price target on the stock by $115. Wedbush analyst Dan Ives now believes Tesla stock could trade for $515 per share. That’s a new high among Wall Street analysts and represents just Ives’ base case.

In his most optimistic scenario, Ives expects Tesla shares to be worth up to $650 Barrons. Tesla shares are up 84% since the US election, but Ives believes there is still over 10% upside potential from the stock’s price at the time of this writing, even in his base case.

The sharp rise in Tesla shares is not due to any major changes at the company. Instead, investors appear to believe that things have improved significantly for the company’s self-driving technology and its plans for a fleet of robotaxis. This confidence stems from CEO Elon Musk’s role as a close adviser to President-elect Donald Trump.

In his report, Ives wrote that the new Trump administration represents “a complete game-changer for autonomous and AI (artificial intelligence) history in the coming years” for Tesla and Musk. He believes the new government’s policies will help Tesla roll out its full self-driving technology (FSD) in a driverless fleet of robot taxis as well as subscriptions for Tesla drivers. However, the question for investors is how much this opportunity will be worth to the company.

Some, like Ives, believe this is enough to push Tesla to a value of $2 trillion within the next 12 to 18 months. However, investors who buy the stock now should do so with their eyes open. Any further delays or stumbles in Tesla’s efforts to make driverless cars mainstream will undoubtedly impact its stock price.

For those who can focus on the years and decades to come, owning Tesla could still be worth it. In addition to self-driving cars, Tesla’s future could also include growing energy storage sales and humanoid robotics that can help companies operate more efficiently. Ives seems to be trying to stay ahead of the crowd with his estimates.

When our team of analysts has a stock tip, it might be worth listening. Finally, Stock Advisor The average total return is 919% – a stunning outperformance compared to 178% for the S&P 500.*

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*Stock Advisor returns as of December 16, 2024

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