1 Wall Street Analyst Just Raised Tesla Stock's Price Target by Over $100. Is It a Buy?

Tesla (NASDAQ: TSLA) stock had a banner year in 2024. Shares of the electric vehicle (EV) leader soared by over 62%. Many investors surmised that CEO Elon Musk's position as a Donald Trump advisor will benefit both the company and its shareholders.

Tesla disappointed investors with its fourth-quarter delivery report this week, though, as it delivered fewer EVs than expected and didn't quite match 2023's total. Still, Canaccord Genuity analyst George Gianarikas just raised his price target on the stock by $106 per share. The stock could keep rising above his $404 target if some things go right.

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Gianarikas maintained a buy rating and remains bullish on the stock despite the weaker-than-expected fourth-quarter delivery report. He sees huge growth potential, but Tesla investors should pay attention to how Gianarikas decided on the new price target.

Tesla's new products are the key

Tesla's full self-driving technology (FSD) is an important part of its plan. Gianarikas noted that the latest version of Tesla's self-driving software has generated increasing excitement among users. Many investors focus on the potential robotaxi fleet that Musk has said technology could help create.

The analyst also noted in a CNBC interview that Tesla owners paying the additional $8,000 upgrade for existing vehicles to adopt FSD would result in a big boost in profit margin. That would help provide a return on the huge amount of capital Tesla spends on artificial intelligence (AI) infrastructure to develop FSD.

The Canaccord analyst is valuing Tesla at 40 times what he forecasts as 2027 earnings. While that seems like a rich valuation, Tesla could grow earnings at twice the rate of other large technology stocks over the next several years, he said.

The stock is a buy if its new products succeed. Those include fully autonomous cybercabs and humanoid robots along with accelerating energy storage output with the construction of Tesla's Shanghai megafactory completed late last year. Tesla more than doubled energy storage deployments for the second straight year in 2024, and those are expected to increase again in 2025.

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Howard Smith has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.